Abstract
Over half a dozen cryptocurrency exchanges filed insolvency proceedings in the United States and Canada during 2022. Many of these bankruptcies were the result of systemic and fraudulent activity by bad actors who used ambiguity in the law to avoid regulation and reporting and misrepresented the risks to investors. In many instances, investors who bought and traded cryptocurrency on these failed exchanges have been treated not as owners, and not as secured creditors, but as general unsecured creditors. This article advocates that persons trading on exchanges need to be classified either as owners, or if that is not possible, then as secured creditors, with respect to their individual cryptocurrency. Article 12 of the Uniform Commercial Code adopts control as the method for establishing status as a secured creditor with cryptocurrency as the collateral. This article further proposes that the United States should create a comprehensive national filing system for cryptocurrency. Article 12 should be further amended to recognize that filing system as a method for perfecting security interests in cryptocurrency, to legitimize cryptocurrency, and to uniformly assure investor protections.