Many people get into cryptocurrency because of its supposed decentralization. However, legally speaking, it may not be as decentralized as you think.
Despite some major setbacks, the crypto industry is still booming. At the time of writing, Bitcoin is over $90,000. Other coins have also seen massive gains, and individual cryptocurrencies have been promoted by mainstream celebrities and politicians alike.
Given just how much money there is in the industry, it’s no surprise that there are many scams in the crypto space. There are also numerous questions about ownership—specifically, you might think you own your crypto, but do you really?
Now, a user on TikTok has sparked discussion with a surprising answer.
Who Owns Your Cryptocurrency?
In a video with over 262,000 views, TikTok user and trial lawyer Joanne L. Molinaro (@thekoreanvegan) shares “random stuff [she] learned while being a trial lawyer.”
There are many fun facts in this video. For example, the amount of detergent you need when washing clothes is often way less than manufacturers recommend. She also says that what we know as cardboard is actually called containerboard, that Americans don’t really eat whole turkeys outside of Thanksgiving, that some construction adhesives are sensitive to light and heat, that Illinois contractors are required to give clients a pamphlet detailing their rights, and that high-powered executives aren’t exactly careful about what they watch and click on online.
However, one point that caught many viewers’ attention was the last in the video.
“If you are a bitcoin or cryptocurrency holder: just FYI, unless you are holding that crypto in your very own wallet—which I highly recommend—whatever company is holding it for you, that is called an exchange,” she explains. “And if that exchange files for bankruptcy, your Bitcoin becomes their Bitcoin. That is a basic function of bankruptcy law.”
“I learned this while representing a number of creditors in the then single largest Chapter 11 cryptocurrency case filed under the United States Code,” she adds.
She closes by noting that this is not legal advice.
Is This True?
The answer is a bit complicated.
Whether one is entitled to their cryptocurrency when the exchange declares bankruptcy depends on the exchange, their terms of service, and what products the customer was using when they were a part of that exchange.
For example, in the case of crypto exchange Celsius, courts determined that those who were a part of the company’s “Earn” program, which gave holders benefits, had “unambiguously transfer[red] title and ownership” of their assets to Celsius. This means that, in the event of bankruptcy, Celsius was legally allowed to sell that cryptocurrency.
However, this isn’t a universal finding. After BlockFi declared bankruptcy, the company was allowed to return cryptocurrency to those who held their crypto in non-interest-earning accounts. This means that the true answer to “Who owns your cryptocurrency when you put it on an exchange?” isn’t exactly simple.
An Important Caveat
While one may have a legal right to cryptocurrency stored in non-interest-earning accounts, that doesn’t mean that they’ll actually get it back—or, if they do eventually get it, there’s no promise it will happen quickly.
For example, the exchange FTX declared bankruptcy around three years ago. Despite this, asset repayments only began in early 2025. Additionally, repayments were made based on the USD value at the time of bankruptcy. Although customers eventually got 119% of the money they put in, Bitcoin has gone up by over 200% since FTX’s failure.
If one wants to make sure this doesn’t happen to you, you can hold your cryptocurrency in a hardware wallet. However, these too can have issues. One man accidentally threw away a hard drive containing his wallet, resulting in losses of almost $1 billion.
@thekoreanvegan Random stuff I learned while lawyering. #lawtok
♬ original sound – Joanne L. Molinaro (이선영) – Joanne L. Molinaro (이선영)
Commenters Have Stories
In the comments section, users shared their own experiences with crypto exchanges.
“A coworker of mine had five Bitcoin on an exchange. That exchange was taken over by the government because of fraud,” recalled a user. “My coworker lost his five Bitcoin. That was back when BTC was about 20k.”
“I’ll pitch in and add: your bitcoin wallet is your private key (the long sequence of letters and numbers). If you do not have both your public and private key written down somewhere, or the seed phrase backup, then you do not own your wallet,” stated another.
“I lost my crypto that way. Thankfully, it wasn’t life changing money,” recalled a third.
BroBible reached out to Molinaro via email.