An obscure DOJ regulation, 28 CFR 9.8(c), often leaves cryptocurrency fraud victims without restitution, prioritizing government claims on forfeited assets over compensating victims. This regulation limits recovery to the value of stolen assets at the time of loss, disregarding significant appreciation in volatile markets like crypto. Despite the rise in crypto fraud complaints, the regulation continues to hinder victims' recovery efforts, as seen in the recent FTX case where creditors missed out on substantial gains due to the timing of their compensation.
