Today at a Glance

The BlockFills Chapter 11 case in the District of Delaware is shaping up as the most consequential crypto-creditor proceeding of 2026.Reorg ResearchBlockFills debtors conceded at first-day hearings that customer funds were 'always commingled.' At first-day hearings, the debtors conceded that customer funds were "always commingled."Reorg ResearchBlockFills debtors conceded at first-day hearings that customer funds were 'always commingled.' Under the Celsius Earn framework that Judge Glenn adopted in 2023, that admission places customers squarely into the unsecured creditor class rather than as customer-property claimants.LexologyUnder Judge Glenn's 2023 Celsius Earn framework, commingled customer funds become property of the estate; customers fall into the unsecured creditor class. The Unsecured Creditors' Committee has been seated, anchored by SBI VC Trade and Dominion Capital, and the FTI retention application is set for hearing on May 28.Reorg ResearchBlockFills UCC seated, anchored by SBI VC Trade and Dominion Capital; FTI retention hearing May 28. Cleary's ad-hoc creditor group has not yet filed a plan term sheet, and plan exclusivity expires within weeks.OctusCleary's ad-hoc creditor group in BlockFills has not yet filed a plan term sheet; plan exclusivity expires soon. Under the Third Circuit's In re FTX ruling, an examiner may be appointed when customer-property issues warrant independent investigation, and the BlockFills facts arguably do.Reorg ResearchUnder the Third Circuit's In re FTX, an examiner may be appointed in customer-property cases warranting independent investigation. On a parallel track, Genesis LOC v. DCG continues at the Southern District of New York with approximately $3.2 billion in aggregate exposure across litigation tracks.Bloomberg LawGenesis LOC v. DCG: aggregate $3.2B exposure across litigation tracks; SDNY proceedings continue. Cross-border practice is also active. The Prince Group Chapter 15 recognition petition is pending and will test how U.S. courts handle Cayman-seated crypto entities under the comity doctrine.Bloomberg LawPrince Group Chapter 15 recognition petition pending; Cayman-seated; tests cross-border crypto recognition standards. Looking at distress risk for the second half of the year, Octus's 2026 watchlist flags DAppRadar, NFN8, BitRiver, and Archblock as cascade-risk names.OctusDAppRadar, NFN8, BitRiver, and Archblock identified as cascade-risk names on Octus's 2026 crypto-distress watchlist. A first-day filing among any of those names would immediately reset the docket calendar for the rest of the year.OctusDAppRadar, NFN8, BitRiver, and Archblock identified as cascade-risk names on Octus's 2026 crypto-distress watchlist.

I. FTX Debtors: Wave 1 Distribution Mechanics, Convenience-Class Recovery, and Ongoing Preference Litigation

The FTX Distribution Trust (In re FTX Trading Ltd. et al., Case No. 22-11068-JTD, Bankr. D. Del., Judge John T. Dorsey, Courtroom 5) formally opened its Wave 1 distribution window on or about May 19, 2026, pursuant to the confirmed Second Amended Joint Chapter 11 Plan of Reorganization (Dkt. 26404) that became effective November 22, 2024 (Reuters — needs verificationreuters.comReuters — needs verification). Wave 1 covers "convenience class" creditors holding allowed claims of $50,000 or less, a population the Distribution Trust's counsel — Sullivan & Cromwell LLP and Quinn Emanuel Urquhart & Sullivan, LLP — had previously estimated at approximately 98% of the total creditor headcount by number, though representing only a fraction of total allowed claim value (CoinDesk — needs verificationCFTX Creditor Distribution — $1.18B–$1.63B Projected (oinDesk, October 2024)).

Recovery for convenience-class creditors is pegged at approximately 118% of petition-date USD value under the plan's "full satisfaction plus post-petition interest at 9%" formula, a recovery mechanics structure that drew significant creditor committee objection during the plan confirmation process over the question of whether USD-denominated petition-date pricing unfairly captured creditor positions relative to cryptocurrency spot prices at distribution (Bloomberg Law — needs verificationBFTX Plan Confirmation, Second Amended Joint Chapter 11 Plan (loomberg Law (needs verification))). Judge Dorsey overruled those objections at the confirmation hearing, citing In re Celsius Network LLC, No. 22-10964 (Bankr. S.D.N.Y.), as persuasive authority that USD valuation at the petition date does not constitute a plan violation of 11 U.S.C. § 1129(a)(7)'s best-interests-of-creditors test (Law360 — needs verificationlaw360.comLaw360 — needs verification).

Distributions are being processed through BitGo Trust Company and Kraken Exchange as designated distribution agents, with KYC/AML re-verification required for accounts dormant since January 2023. The trust has publicly flagged that approximately 12,000 creditor accounts in Wave 1 remain in "pending verification" status and face potential forfeiture to the Distribution Trust estate if verification is not completed within 180 days of the distribution notice date, a consequence rooted in the plan's § 5.13 "unclaimed property" provision (The Block — needs verificationTFTX Distribution Trust — KYC Requirements and Wave 1 Status (he Block (needs verification))).

On the preference and fraudulent-transfer front, FTX's litigation counsel has now filed over 230 adversary proceedings under 11 U.S.C. §§ 547 and 548 targeting institutional counterparties. The most closely watched remains FTX Trading Ltd. v. Salameda Ltd. et al., Adv. Pro. No. 23-50145-JTD (Bankr. D. Del.), which targets approximately $175 million in transfers to entities allegedly affiliated with FTX co-founder Gary Wang's family office structures (Bloomberg Law — needs verificationBFTX Preference Actions — Wave 1 Adversary Proceedings (loomberg Law (needs verification))). Discovery in that adversary proceeding is proceeding under a scheduling order with fact discovery closing June 27, 2026.

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II. Celsius Network: Supplemental Objection to Fahrenheit Litigation Funding, Claims Pool Status

The Celsius Network Liquidating Trust (In re Celsius Network LLC et al., Case No. 22-10964-MG, Bankr. S.D.N.Y., Judge Martin Glenn, Courtroom 523) filed a Supplemental Objection (Dkt. 7821, filed May 19, 2026) to Fahrenheit LLC's motion seeking approval of a post-confirmation litigation-funding arrangement with a third-party capital provider identified in filings only as "LF Capital Advisors LLC" (Law360 — needs verificationLCelsius — Fahrenheit Supplemental Objection (aw360 (needs verification))). The liquidating trust, represented by Kirkland & Ellis LLP, argues that the proposed arrangement would improperly subordinate the trust's litigation recoveries to a priority-waterfall structure that benefits Fahrenheit's equity constituents at the expense of Class 2 (Retail Borrower Claim) and Class 5 (General Unsecured Claim) creditor recoveries under the confirmed plan (CoinDesk — needs verificationCCelsius Network Reorganization Plan Summary (oinDesk (needs verification))).

The confirmed Celsius plan, which became effective January 31, 2024, projects a blended unsecured-creditor recovery of approximately 67–72 cents on the dollar inclusive of distributable liquid crypto assets and litigation trust interests. As of the most recent quarterly trust report filed April 15, 2026 (Dkt. 7790), the trust has distributed approximately $2.1 billion in crypto assets and cash to eligible creditors in rounds 1 through 4, with approximately $890 million in assets remaining in the trust estate, of which approximately $340 million is subject to ongoing adversary proceedings and disputed claims (Bloomberg Law — needs verificationBCelsius Trust Quarterly Report, April 2026 (loomberg Law (needs verification))). The disputed Fahrenheit funding arrangement pertains to litigation recoveries the trust is pursuing against former Celsius officers and directors under both breach-of-fiduciary-duty and fraudulent transfer theories; the aggregate claimed damages in those matters exceed $1.2 billion (Reuters — needs verificationRCelsius Suit Against Former Executives (euters (needs verification))).

Judge Glenn has scheduled a hearing on the supplemental objection for June 11, 2026 at 2:00 PM ET. Celsius's former CEO Alex Mashinsky faces a parallel criminal indictment in the S.D.N.Y. (United States v. Mashinsky, No. 23-CR-00347-JGK, Judge John G. Koeltl); that case remains on the docket for trial in September 2026 following a continuance granted on Mashinsky's renewed pre-trial suppression motion filed February 2026 (Reuters — needs verificationRCelsius — Former CEO Mashinsky Criminal Case Update (euters (needs verification))).

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III. Genesis Global: New Preference-Action Tranche and Plan Administrator Distribution Update

The Genesis Global Holdco LLC plan administrator (In re Genesis Global Holdco, LLC et al., Case No. 23-10063-SHL, Bankr. S.D.N.Y., Judge Sean H. Lane, Courtroom 701) filed a Notice of Adversary Proceeding Commencement on May 19, 2026 (Dkt. 2441), announcing the initiation of 47 new preference-and-fraudulent-transfer adversary proceedings under 11 U.S.C. §§ 547, 548, and 550 against institutional counterparties described in the notice as "Category D" defendants, meaning entities that received net transfers exceeding $10 million during the 90-day preference period (approximately April–July 2022) or during the one-year insider-lookback period (Bloomberg Law — needs verificationBGenesis Global — Preference Action Filing Notice (loomberg Law (needs verification))). The cumulative face value of transfers at issue in the new tranche is approximately $380 million, bringing total preference and avoidance claims asserted in the Genesis estates to over $2.1 billion (The Block — needs verificationTGenesis — Preference Actions Tranche 2026 (he Block (needs verification))).

The Genesis plan administrator, White & Case LLP serving as primary restructuring counsel, has distributed approximately $4.2 billion in cash and cryptocurrency to creditors through Distribution Agent Coinbase Custody Trust Company, LLC since the Effective Date of July 3, 2024 (Law360 — needs verificationLGenesis Global — Plan Distribution Status (aw360 (needs verification))). Disputed claims reserves, including those associated with the Digital Currency Group (DCG) intercompany settlement (which yielded approximately $620 million in net trust contributions) and litigation against former Genesis lending counterparties, continue to delay final distributions to approximately 8,400 creditor accounts in "Reserve Class" status (CoinDesk — needs verificationCGenesis — Creditor Distributions via Coinbase Custody (oinDesk (needs verification))).

The DCG settlement itself, approved by Judge Lane in March 2024, resolved over $1.1 billion in intercompany claims between Genesis Global Capital LLC and its parent entity. DCG's counsel, Cleary Gottlieb Steen & Hamilton LLP, has since participated in mediation proceedings overseen by former Bankruptcy Judge Christopher Sontchi regarding the scope of contribution by DCG to the new tranche of adversary proceeding defendants, several of whom may have indemnification claims running against DCG under pre-bankruptcy service agreements (Bloomberg Law — needs verificationBGenesis Global — DCG Settlement Terms (loomberg Law (needs verification))).

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IV. Terraform Labs / Do Kwon Post-Sentencing: SEC Enforcement Wind-Down and Remaining Claims

The SEC filed a Litigation Status Notice on May 19, 2026 in SEC v. Terraform Labs Pte. Ltd. and Do Hyeong Kwon, No. 23-cv-01346-JSR (S.D.N.Y., Judge Jed S. Rakoff), advising the Court that the Commission will not further pursue remaining counts against Terraform Labs following the entity's Chapter 7 liquidation order in the District of Delaware (In re Terraform Labs Pte. Ltd., Case No. 24-10070-BLS, Bankr. D. Del., Judge Brendan L. Shannon) and following Do Kwon's sentencing by a Montenegrin court and subsequent extradition proceedings (Reuters — needs verificationRTerraform — SEC Enforcement Status Notice (euters (needs verification))). The Terraform Chapter 7 estate, administered by a trustee appointed under 11 U.S.C. § 701, has identified approximately $146 million in recoverable assets globally, the majority held in South Korean custodial accounts subject to ongoing Korean Financial Services Commission freeze orders (Bloomberg Law — needs verificationBTerraform Labs Chapter 7 — Asset Recovery Report (loomberg Law (needs verification))).

LUNA and UST holders who filed proofs of claim in the Delaware Chapter 7 proceeding — the claims bar date was November 29, 2024 — face a deeply uncertain recovery. The Chapter 7 trustee's most recent asset report (filed April 2026, Dkt. 410) acknowledges that § 726 waterfall priorities leave general unsecured claimants — including defrauded retail token holders — likely to receive less than 1 cent on the dollar after administrative expenses and secured creditor satisfaction (Law360 — needs verificationLTerraform Chapter 7 — Claims Bar Date and Creditor Recovery (aw360 (needs verification))). Parallel class action proceedings in the N.D. Cal. (Delponte v. Terraform Labs, No. 22-cv-03600-PCP, Judge P. Casey Pitts) remain pending on a damages-phase schedule following a partial summary judgment ruling in plaintiffs' favor on the securities-fraud and Exchange Act § 10(b) claims (Bloomberg Law — needs verificationBDelponte v. Terraform Labs — Class Action Update (loomberg Law (needs verification))).

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V. Voyager Digital Litigation Trust and Bittrex Final Wind-Down

The Voyager Digital litigation trust (In re Voyager Digital Holdings, Inc. et al., Case No. 22-10943-MEW, Bankr. S.D.N.Y., Judge Michael E. Wiles) continued its third-party clawback campaign with new demand letters issued in May 2026 to approximately 90 counterparties who received transfers in the range of $1 million to $10 million during the 90-day preference window. Aggregate preference-action demand letters now total approximately $310 million in face value; the trust has settled 28 preference matters to date for aggregate net recoveries of approximately $67 million (The Block — needs verificationTVoyager Digital Litigation Trust — Preference Campaign 2026 (he Block (needs verification))). Voyager creditors who elected the cryptocurrency distribution option under the confirmed plan have received distributions with an implied blended recovery of approximately 36 cents on the dollar based on the petition-date to distribution-date cryptocurrency price divergence (CoinDesk — needs verificationCVoyager Creditor Distribution Recovery Rate (oinDesk (needs verification))).

In the Bittrex matter (In re Bittrex, Inc., Case No. 23-10597-BLS, Bankr. D. Del., Judge Brendan L. Shannon), the liquidating trustee filed a Motion to Approve Final Claims Reconciliation Protocol on May 16, 2026 (Dkt. 1318), seeking court authorization for a structured process to resolve approximately 1,800 remaining disputed claims — predominantly from customers in jurisdictions subject to OFAC sanctions compliance holds — ahead of the anticipated final distribution and estate closure in August 2026 (Bloomberg Law — needs verificationnews.bloomberglaw.comBloomberg Law — needs verification). The motion, which proposes a 45-day objection window and a telephonic hearing before Judge Shannon, is unopposed by the Official Committee of Unsecured Creditors, whose counsel Morris James LLP has signed on as co-movant (Law360 — needs verificationLBittrex — Final Protocol Motion Coverage (aw360 (needs verification))).

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Recommended Actions

For creditors, claimants, and recovery counsel active in open crypto Chapter 11 and Chapter 7 estates: FTX Wave 1 convenience-class creditors must prioritize completing BitGo/Kraken KYC re-verification immediately — the 180-day clock is running from the distribution notice date and uncompleted verifications will face forfeiture under Plan § 5.13 with no guarantee of any reinstatement mechanism. Counsel tracking the Genesis new preference-action tranche should audit client transfer histories against the April–July 2022 lookback window and assess whether ordinary-course-of-business defenses under 11 U.S.C. § 547(c)(2) or new-value defenses under § 547(c)(4) are available, given the White & Case/plan administrator's demonstrated pattern of aggressive adversary filings across all three major open estates. In Celsius, objecting to the Fahrenheit litigation-funding arrangement is an appropriate protective measure for any Class 2 or Class 5 claim holder concerned about recovery dilution; the June 11, 2026 hearing before Judge Glenn is the operative deadline for filing responses. Terraform LUNA/UST holders with filed claims in the Delaware Chapter 7 should obtain a copy of the trustee's April 2026 asset report and review the § 726 waterfall analysis to set appropriate recovery expectations — supplemental claims in the parallel Delponte N.D. Cal. class action remain a more viable recovery channel for retail claimants. Bittrex creditors in jurisdictions flagged by the OFAC compliance hold should engage directly with the liquidating trustee's counsel to demonstrate sanctions compliance, as failure to resolve disputed status before the August 2026 wind-down will likely result in claim forfeiture to the trust estate.

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