In a major policy reassessment, the U.S. Department of Justice (DOJ) is reviewing how cryptocurrency fraud victims are compensated in federal cases. According to a DOJ notice published on April 14, 2025, the agency is rethinking its approach to digital asset restitution, particularly in light of the FTX bankruptcy and other high-profile crypto collapses. The current model compensates victims based on the market value of assets at the time of loss—a method now under heavy scrutiny due to the crypto market’s notorious price volatility.
Fixed-Value Repayments Under Fire
Under existing U.S. legal procedures, victims are typically reimbursed using the fiat value of their lost crypto holdings on the date the loss occurred. While this aligns with traditional bankruptcy frameworks, it has sparked dissatisfaction in the digital asset space. Many affected investors—especially in the Celsius, Voyager, and FTX cases—have seen their former holdings appreciate dramatically in recent years. Yet, their compensation reflects old valuations, ignoring massive price increases.
Legal expert Calvin Koo warns that this one-size-fits-all model is becoming outdated. He argues that fixed-date assessments can create unfair outcomes: some victims are undercompensated, while others may exploit timing advantages. Increasing judicial discretion in crypto repayment calculations is gaining bipartisan support.
FTX Victims Demand Crypto, Not Cash
The FTX bankruptcy ruling awarded victims payouts in USD, valued at the time of FTX’s collapse. But the 2023–2025 market recovery—fueled by bullish momentum—has significantly inflated the prices of assets like Ethereum and Solana. As a result, many investors are now pushing for in-kind restitution, meaning the return of the exact tokens they lost, rather than their past cash value.
However, that idea is not without risk. Cryptocurrency prices fluctuate wildly—any delay in legal processing could once again expose victims to losses. Attorney Evelyn Baltodano Sheehan notes that while the current structure aims to create predictable outcomes, the crypto ecosystem’s evolution requires modernized frameworks that reflect both asset volatility and real-time valuations.
More than 300 victims have filed formal objections to the fixed-value repayment model. The DOJ has acknowledged these concerns and stated that regulatory and legislative updates could shape a new, more dynamic standard for crypto-related compensation.
What Comes Next?
The DOJ is expected to consult with federal courts and Congress to determine whether new legal standards are necessary. Any policy change could impact future bankruptcy rulings, including those tied to ongoing enforcement actions. According to Dey There, this shift signals the growing tension between conventional legal systems and the rapidly evolving dynamics of digital assets.
For now, all eyes are on how federal agencies balance justice, practicality, and the unique characteristics of cryptocurrencies in crafting next-generation legal remedies.
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