DOJ Revisits Compensation Procedures for Digital Asset Investors
In a recent report from Unchained, it was revealed that the U.S. Department of Justice (DOJ) is planning to revisit its procedures for compensating investors whose digital assets have been seized in cases of theft and fraud. This review is particularly relevant given the notable bankruptcy cases of 2022, which included high-profile entities such as FTX, Voyager Digital, Celsius Network, Genesis Global, BlockFi, and Gemini Trust.
While not all the bankruptcies were directly associated with criminal activities, the DOJ noted that many investors suffered significant losses due to fraudulent actions surrounding these firms. It’s also notable that the value of digital assets has surged significantly in the years following these incidents.
Court Strategies and Legal Challenges
However, despite the apparent discrepancy where victims are compensated at market values far below their current worth, the court’s strategy is not aimed at penalizing creditors. Under existing U.S. bankruptcy law, assets seized are mandated to be returned to affected individuals at their value in U.S. dollars at the time the fraud occurred.
Experts argue that although this may seem inequitable to victims, there are substantial legal rationales for this rule, making any potential changes to the practice challenging.
“The legal framework surrounding these compensations is complex and requires careful consideration from all parties involved.”
