DOJ Reevaluates FTX Victim Compensation Amid Crypto Valuation Concerns

The US Department of Justice (DOJ) is reviewing how victims of digital asset fraud, including those affected by the collapse of FTX, are compensated. Concerns have been raised about outdated valuation methods that reimburse investors based on claim filing dates rather than current market rates, potentially shortchanging victims. The DOJ’s internal memo highlights the need for updated policies to address discrepancies in asset recovery.

US DOJ Reviews Crypto Compensation Rules

The US Department of Justice (DOJ) has initiated a review of how victims of digital asset fraud are compensated, following concerns over outdated valuation methods. According to a recent internal DOJ memo, many investors affected by crypto platform collapses, such as FTX, have only received reimbursement based on the value of their holdings at the time they filed claims, not at current market rates. The DOJ emphasized that many assets were lost due to theft or fraud, causing investors to miss out on significant potential gains. For instance, when FTX filed for bankruptcy in November 2022, Bitcoin (BTC) traded at under $20,000.

Sam Bankman-Fried Moved to Terminal Island, Home to Infamous Inmates

FTX founder Sam Bankman-Fried was moved to the low-security Federal Correctional Institution Terminal Island in Los Angeles on April 18, 2025. Notably, this prison once housed several high-profile inmates, including cult leader Charles Manson, notorious crime boss Al Capone, and former Theranos COO Ramesh “Sunny” Balwani, who was convicted of fraud. Before landing at Terminal Island, Fried was held at FCI Victorville, a medium-security prison in San Bernardino County known for its tough conditions and political atmosphere.