1 day ago
The US Department of Justice (DOJ) has initiated a reappraisal of however victims of integer plus fraud are compensated, pursuing concerns implicit outdated valuation methods.
According to a caller interior DOJ memo, galore investors affected by crypto level collapses, specified arsenic FTX, Celsius, Voyager, Genesis, BlockFi, and Gemini Trust, person lone received reimbursement based connected the worth of their holdings astatine the clip they filed claims, not astatine existent marketplace rates.
While not each these bankruptcies stemmed from transgression charges, the DOJ emphasized that galore assets were mislaid owed to theft oregon fraud. As a result, investors missed retired connected important imaginable gains they could person realized if they had retained their crypto.
For context, erstwhile FTX filed for bankruptcy successful November 2022, Bitcoin traded astatine nether $20,000. By January 2025, the apical integer asset’s worth had surged to implicit $108,000, representing an implicit 500% increase.
Yet, creditors are receiving payouts successful fiat currency based connected the 2022 valuation. These repayments autumn acold abbreviated of the assets’ existent value, adjacent with added interest.
The DOJ acknowledged that existent regulations bounds betterment to the asset’s dollar worth astatine the clip of the fraud. The bureau said this attack efficaciously denies victims the upside of the asset’s appreciation, contempt having borne the hazard of loss.
One FTX creditor advocate, “Mr. Purple,” emphasized the urgency of specified reforms, noting that integer assets merit ineligible designation akin to accepted fiscal instruments nether bankruptcy law.
To code the issues, the DOJ has tasked the Office of Legal Policy and the Office of Legislative Affairs with evaluating imaginable regulatory and legislative updates. These changes could see reforms to the bankruptcy code, peculiarly to bespeak the unsocial characteristics of integer assets.
DOJ’s broader crypto shift
This inaugural forms portion of a broader strategical displacement wrong the DOJ’s attack to integer assets.
Last week, CryptoSlate reported that the section disbanded its National Cryptocurrency Enforcement Team (NCET), a portion focused initially connected probing crypto-related crimes.
The DOJ said it wants unit to ore connected wide transgression activities specified arsenic scams and marketplace manipulation, alternatively than investigating lawful entities similar crypto exchanges, wallet providers, oregon decentralized tools.
In addition, the DOJ is actively participating successful President Donald Trump’s Working Group connected Digital Asset Markets. The radical was formed nether Executive Order 14178 to measure the regulatory scenery of the crypto industry.
The DOJ volition supply attorneys to assistance successful drafting proposals and recommendations for authorities and bureau guidance. These recommendations volition beryllium compiled successful a ceremonial study to the president, aiming to modernize integer plus regulations to align with nationalist argumentation objectives.
Once the president approves the proposals, the DOJ has committed to implementing the recommended actions to guarantee amended capitalist extortion and much clarity for integer plus companies operating wrong the US.
The station US DOJ reviews crypto compensation rules amid valuation concerns appeared archetypal connected CryptoSlate.
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