Customers of failed crypto ventures like FTX, Celsius Network or Genesis may one day see some of their money again, but they better be prepared to wait.
Experts say recovering money from frauds and other financial collapses is a complex and hard-to-predict process and while often some money can be returned, it can take years to get it into victims’ hands.
Each situation is unique, with differences often lying in whether the recovery effort is being run through a bankruptcy process, a court-appointed receiver, or through restitution agreements hammered out by prosecutors, but it is unlikely anyone will be made whole.
“It is fair to say that a fraud victim probably has a better than zero shot at some recovery, but the average recovery is likely in the pennies to dimes on the dollar,” says Jordan Maglich, a Florida-based attorney who runs the blog, Ponzitracker.
FTX and Celsius imploded amid allegations of fraud and Genesis ground to a halt largely due to a number of loans that went bad following a collapse in crypto prices. All three have filed for bankruptcy-court protection, meaning a judge will ultimately decide what happens to whatever money is left.
“A bankruptcy filing subjects them to the bankruptcy process which contains significant tools to locate, preserve, and ultimately distribute assets to victims,” Maglich said.
On Jan. 11, lawyers for FTX told a bankruptcy court judge they had located some $5 billion in…
