BRADLEY D. JONES (VSB No. 85095)

Counsel for Trustee

ODIN FELDMAN & PITTLEMAN PC

1775 Wiehle Avenue, Suite 400

Reston, Virginia 20190

Phone: 703-218-2176

Fax: 703-218-2160

Email: Brad.Jones@ofplaw.com

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

Alexandria Division

In re: *

*

KAREN J. DEMATTEO, * Case No. 20-12626-BFK

* Chapter 7

Debtor. *

TRUSTEE’S MOTION FOR APPROVAL OF THE SALE 

OF CRYPTOCURRENCY BY COINBASE UNDER 11 U.S.C. § 363(b) 

AND FOR TURNOVER OF PROPERTY BY A CUSTODIAN UNDER 11 U.S.C. § 543(b)(1)

DONALD F. KING, TRUSTEE (“Trustee”), the chapter 7 trustee for the bankruptcy estate of 

Karen J. DeMatteo (“Debtor”), by counsel, pursuant to 11 U.S.C. §§ 543(b)(1) and 363(b), 

requests that the Court approve the Trustee’s Motion for Turnover of Property and for Approval 

of the Sale of Cryptocurrency, and in support thereof, states as follows: 

1. The Debtor filed a voluntary chapter 7 petition (“Bankruptcy Petition”) on

December 2, 2020 (the “Petition Date”).

2. The Trustee is the duly appointed chapter 7 trustee. 

3. Among the assets of the Debtor’s bankruptcy estate (“Bankruptcy Estate”) is 

cryptocurrency remaining in certain accounts that the Debtor owned and controlled through the 

cryptocurrency exchange maintained by Coinbase Global, Inc. (“Coinbase”). The Coinbase 

accounts (“Coinbase Accounts”) are associated with the following email addresses of the Debtor: 

karenjdematteo@gmail.com; dematteokaren@gmail.com; and boomersforcrypto@gmail.com. 

4. Some of the funds that were held in the Coinbase Accounts as of the Petition Date 

have been transferred by the Debtor and are subject to a separate motion for turnover filed by the 

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Trustee. However, there is remaining cryptocurrency in one or more of the Coinbase Accounts. 

The Coinbase Accounts currently hold the following cryptocurrencies in the following amounts: 

Account Name Balance

ATOM Wallet 0.678465 ATOM

BCH Wallet 2.3470134 BCH

CGLD Wallet 131.35019738 CGLD

ETH Wallet 2.08504712 ETH

GRT Wallet 1,267.26620051 GRT

MANA Wallet 48.04648521 MANA

OGN Wallet 186.67356112 OGN

UNI Wallet 56.68548114 UNI

USDC Wallet 998.907518 USDC

XTZ Wallet 67.837475 XTZ

YFI Wallet 0.01243311 YFI

5. The Trustee is seeking authority to sell this cryptocurrency through Coinbase 

pursuant to 11 U.S.C. § 363(b). 

6. The value of this cryptocurrency fluctuates with market prices for each of the 

cryptocurrencies and so the sale price will depend on the value of each currency at the time it is 

liquidated by Coinbase. Given the nature of these assets, the Trustee anticipates that the market 

for these currencies may be volatile. However, the Trustee believes reducing the currency to cash 

is in the best interest of the Bankruptcy Estate.

A. The Court Should Require Sale of Funds and Turnover to the Bankruptcy Estate Pursuant 

to 11 U.S.C. § 543(b)(1).

7. At the time the Bankruptcy Petition was filed, Coinbase was a custodian, within the 

meaning of 11 U.S.C. §101(11), holding the Coinbase Accounts for the benefit of the Debtor. 

8. Pursuant to 11 U.S.C. § 543(b)(1), when a bankruptcy case is filed, a custodian is 

required to “deliver to the trustee any property of the debtor held by or transferred to such 

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custodian, or proceeds, product, offspring, rents, or profits of such property, that is in such 

custodian’s possession, custody, or control on the date that such custodian acquires knowledge of 

the commencement of the case.”

9. The Coinbase Accounts are the property of the Bankruptcy Estate and in the

custody, or control of Coinbase as custodian. Currently, the Coinbase Accounts hold only 

cryptocurrency which is digital currency which has a value in United States dollars, but which 

needs to be sold at market prices in order to be converted into cash. 

B. The Court Should Approve the Sale of the Cryptocurrency Pursuant to 11 U.S.C. 

§ 363(b).

10. The Court should require Coinbase to sell and/or convert the cryptocurrency into 

United States dollars and turn over the proceeds of the sale to the Trustee. 

11. The Internal Revenue Service (IRS) recognizes cryptocurrency as a currency which 

is subject to taxation. As part of the sale and turnover, the Trustee requests that Coinbase update 

the account statement to reflect that the Trustee is authorized to exercise control over the Coinbase 

assets. The Trustee further requests that Coinbase be required to deliver any tax basis information 

it is maintaining with respect to the Coinbase Accounts to the Trustee, including providing the 

Trustee with a copy of any IRS Form 1099-Misc or other similar tax document(s) issued in 

connection with the Coinbase Accounts or the sale of the cryptocurrency.

12. Based on the information received by the Trustee, the Trustee believes the Coinbase 

Accounts are held by the Debtor free and clear of any secured claims, as there are no secured 

claims listed with respect to this cryptocurrency in the Debtor’s schedules. See Dkt. No. 1 at 16–

17.

13. The Trustee requests that the Court grants his Motion and authorize Coinbase to 

sell and convert to United States dollars the cryptocurrency held in the Coinbase Accounts and to 

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require Coinbase to turn over the proceeds to the Trustee. To facilitate turnover, the Trustee will 

provide the Coinbase office servicing the client relationship with a mailing address for the Trustee 

and/or wire transfer instructions for the Trustee’s fiduciary account for the Bankruptcy Estate.

14. The Trustee further requests authority to sell and convert to United States dollars 

any additional cryptocurrency that is recovered by the Trustee, including any additional 

cryptocurrency recovered by the Trustee from the Debtor or third parties. The Trustee is in the 

process of recovering from the Debtor additional cryptocurrency or proceeds that were transferred 

by the Debtor post-petition from the Coinbase Accounts. The Trustee in his business judgment 

believes it is in the best interest of the Bankruptcy Estate to liquidate any cryptocurrency recoveries 

through the Coinbase exchange at current market prices. The Trustee requests the Court authorize 

Coinbase to sell and turnover to the Trustee any additional cryptocurrency recovered by the Trustee 

without further order of the Court.

15. Information regarding the proposed sale is as follows:

a. Type of Sale: Public.

b. Purchase Price: Value set by public market.

c. Appraisal Value: There is no appraisal. However, the Trustee through 

counsel has discussed this with Coinbase, which advised that the net 

portfolio value of the accounts as of September 23, 2021, was 

approximately $14,000.00. Depending on the value of each cryptocurrency 

at the time of the sale, the amount realized by the Bankruptcy Estate may 

be higher or lower.

d. Place and Time of Sale: Trustee will issue a sell order to Coinbase any time 

after fourteen (14) days from the date of the Court’s entered order granting 

the Motion.

e. Costs of Sale: Any usual and customary costs charged by Coinbase in 

connection with the sale. 

f. Estimated Trustee’s Commission: $2,150.00 as calculated pursuant to 11 

U.S.C. § 326(a).

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g. Liens: The Coinbase Accounts are not subject to any secured claims.

h. Tax Consequences of Sale to Bankruptcy Estate: The Trustee anticipates 

the proposed liquidation of the Coinbase Accounts may have tax 

consequences, depending on the Debtor’s tax basis in the cryptocurrency 

assets.

i. Net Proceeds of Sale to Bankruptcy Estate: Approximately $11,850.00 after

payment of costs of sale and the Trustee commission and before taxes, 

counsel to Trustee’s fees and expenses, and accounting expenses.

16. The following shall be paid at closing from the proceeds of sale, with the balance, 

if any, to be held by the Trustee pending the final distribution of the assets of this case by the 

Trustee: (i) any fees or taxes owed by the Bankruptcy Estate upon the sale of the cryptocurrency; 

(ii) Coinbase’s fees and costs; and (iii) other costs related to the sale of the cryptocurrency held in 

the three Coinbase Accounts (collectively, “Payments at Closing”).

WHEREFORE, DONALD F. KING, TRUSTEE, by counsel, moves this Court to enter an Order

(i) authorizing Coinbase to sell the cryptocurrency held in the Coinbase Accounts and convert it 

to United States dollars; (ii) authorizing Coinbase to turn over the funds from the sale of the 

Accounts assets to the Trustee; (iii) authorize Coinbase to turn over any additional cryptocurrency 

which is recovered by the Trustee and returned to the Coinbase Accounts; (iv) authorizing the 

Trustee to make the Payments at Closing; (iv) further authorizing the Trustee to take all actions

necessary and reasonable to consummate the sale of the asset held in the Accounts; and (v) granting

such other further relief as it may deem necessary or appropriate.

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DONALD F. KING, TRUSTEE

By counsel

By: /s/ Bradley D. Jones

Bradley D. Jones (VSB No. 85095)

Counsel for Trustee

ODIN FELDMAN & PITTLEMAN PC

1775 Wiehle Avenue, Suite 400

Reston, Virginia 20190

Phone: 703-218-2176

Fax: 703-218-2160

Email: Brad.Jones@ofplaw.com

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CERTIFICATE OF SERVICE

The undersigned certifies that this Motion along with the Proposed Order was served on 

March 8, 2022, (i) electronically upon all registered users in this case pursuant to this Court’s 

CM/ECF procedures; (ii) upon the service list attached to the Notice of Hearing; (iii) upon the U.S. 

Trustee by email to ustpregion04.ax.ecf@usdoj.gov; (iv) upon Coinbase by email to Michael 

Cianfrani at michael.cianfrani@coinbase.com; and (iv) by first class and certified mail upon the 

following:

Karen J. DeMatteo

3808 Mount Atlas Lane

Haymarket, VA 20169-1818

Stephen J. Sheehy, III

11350 Random Hills Road

Suite 700

Fairfax, VA 22030

John P. Fitzgerald, III

Acting United States Trustee for

Region 4

1725 Duke Street, Suite 650

Alexandria, VA 22314

The Corporation Trust Company

R/A for Coinbase, Inc. 

Corporation Trust Center

1209 Orange Street

Wilmington, DE 19801

The Corporation Trust Company

R/A for Coinbase Global, Inc. 

Corporation Trust Center

1209 Orange Street

Wilmington, DE 19801

C T Corporation System

R/A for Coinbase, Inc. 

4701 Cox Road, Suite 285

Glen Allen, VA 23060

The Corporation Trust, Inc.

R/A for Coinbase, Inc. 

2405 York Road, Suite 201

Lutherville Timonium, MD 21093-2264

Coinbase, Inc. 

Attn: Emilie Choi, President & COO

Attn: Michael Cianfrani

430 California Street

San Francisco, CA 94104-1301

/s/ Bradley D. Jones

Bradley D. Jones

#5186513v2 031070/002844

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