Blockchain & Digital Assets

Managing bankruptcies or restructuring for distressed crypto-native companies requires a deep understanding of the unique financial mechanisms in the industry, from staking and lending practices to assessing the technical feasibility and implications to creditors of various bids throughout the auction process. The FTI Consulting team has experience advising distressed crypto exchanges on behalf of unsecured credit councils (“UCCs”), and has conducted evaluations across a range of issues including counterparty risk assessments, validity of historical transactions and potential clawbacks of pre-filing withdrawals.

Digital asset investigations are as unique as the assets involved in such disputes. These complex investigations can span cryptocurrencies, NFTs, virtual assets, smart contracts, crypto mining operations and DeFi programs with blockchain protocols, staking and yielding programs, custodied assets, as well as, in some projects, metaverse environments or entire smart cities. Each of these areas presents unique considerations requiring technical know-how and deep blockchain expertise to prove or disprove claims.

FTI Consulting’s team of certified blockchain and digital assets experts work alongside our cybersecurity, forensic accounting, digital forensics, economics and strategic communications professionals to bring additional expertise to engagements involving regulatory non-compliance, cybercrime, international fraud schemes, fraud, financial crimes and employee misconduct.

FTI Consulting’s Blockchain & Digital Assets practice has led more than 80 digital asset investigations and testified on more than 20 engagements in the United States and Australia. Top law firms routinely rely upon us to present complex information clearly to a multitude of parties, as well as provide expert witness testimony in court.

Backed by our Digital Assets Lab, our team can identify and fully track more than 1,500 digital assets across more than 30 blockchains. Building upon that knowledge, our specialized team is comprised of certified Bitcoin experts, blockchain experts, smart contract developers and cryptocurrency investigators who work with legal teams to fully investigate blockchain and cryptocurrency claims.

Professionals in FTI’s Blockchain & Digital Assets practice have worked on numerous high-profile mergers and acquisitions involving crypto companies and assets. Leveraging our deep technical knowledge, our team can quickly and thoroughly conduct a holistic technical and operational evaluation that includes evaluating wallets, the custody and management of digital assets, privacy and security protocols and all other areas of pre-transactional due diligence and portfolio valuation. FTI Consulting can also perform sophisticated wallet tracing by analyzing transactional relationships and intelligence to identify entities and personas associated with suspect cryptocurrency wallets.

Blockchain technology has a number of use cases, from streamlining the supply chain to validating data reporting for ESG purposes. Yet many organizations lack a clear understanding of the risks, benefits or strategies for implementing blockchain for optimal return. To help bridge this gap, FTI Consulting provides a variety of blockchain advisory services. This includes digital asset strategies involving NFTs, tokenized assets, cryptocurrencies or stablecoins as well as strategic metaverse advisory, Web3 guidance and blockchain project design and implementation.

As more regulations are introduced globally it is important for crypto-native organizations to understand their risk landscape and potential disclosure requirements under these new rules.

Our dedicated team of blockchain and digital assets specialists provide deep technical and operational expertise for our clients including: virtual asset custody assessments, disclosure readiness assessments, smart contract assessments, validation of custodial holdings and FBO (“for benefit of”) fiat accounts, assessment of bi-lateral loans, staking, and trades with significant or notable counterparty risks. In addition, our team can help clients with on-chain validation of customer deposits or withdrawals, on-chain validation of redemption volumes with comparison to industry peers and asset tracing from known insiders.

Our experts have assisted many cryptocurrency companies with designing and implementing processes to address anti-money laundering, sanctions and fraud detection compliance using our industry expertise and cutting-edge technical capabilities. Our team of data experts, former regulators and former risk and compliance officers regularly consult with leading digital-native companies as an independent and trusted advisor. We have applied our expertise to help crypto-native firms develop their capabilities in market risk, credit risk, model risk management, third-party risk and operational risk management.

As the blockchain becomes more ubiquitous, it is essential to be prepare for unintended consequences like theft and cybersecurity incidents. Cyber criminals and nation-state actors stole hundreds of millions in cryptocurrency in 2022 alone – including from large exchanges, high profile individuals, and the everyday crypto enthusiast – often due to a lack of proper security protections. FTI’s cybersecurity experts help make security a top priority, from guidance on fundamentals to infrastructure advisory and complex investigations.