Which in banking is known as bail-in (regulations introduced after 2008). In the financial service industry you can't really do a chapter 11, i.e. operate whil

Which in banking is known as bail-in (regulations introduced after 2008). In the financial service industry you can't really do a chapter 11, i.e. operate while being protected from your creditors, as your business is precisely to take money from creditors (unlike a car manufacturer). That left you as only solution of either doing a bail out (3rd party, typically state, injecting capital) or going bust Lehman's way. Bail-in was introduced where the regulator has the power to declare a bank non viable, and to impose an extra-judicial restructuring over a weekend so the bank can operate normally on Monday morning. The losses in the restructuring follow a modified creditor hierarchy, which essentially follows the creditor hierarchy with some tweaks (tries to avoid restructuring deposits, complex liabilities or anything secured, and favors restructuring subordinated instruments and wholesale funding liabilities). Crypto is reinventing all the financial scandals and fuckups of the last century and re-discovering the benefit of the financial regulations it was designed to avoid.