Crypto exchange bankruptcy: what happens to your money

A crypto exchange bankruptcy can leave customers without access to their money, with a partial repayment, a cash payout instead of crypto, or even no recovery at all. The outcome depends on the company, the contract, the product, the applicable law and the court rulings. There is no single repayment rule that applies to everyone.

What is a crypto exchange bankruptcy?

Bankruptcy is a legal process for managing assets and claims, while insolvency generally describes a business’s inability to meet its obligations. The procedures and terminology differ from country to country.

At a centralized exchange, a company offers crypto buying, selling and custody. Often the company itself, or another custodian, controls the private keys that allow the coins to be moved. Think of the difference between an item you keep at home and one you’ve handed over for safekeeping: in the second case, both the contract and the condition of the custodian matter.

The balance in the app records a right of the customer. It doesn’t prove that matching assets are available.

What did Mt. Gox, Celsius and FTX teach us?

Past collapses showed that repayments can take years and continue through successive distributions.

1. February 2014 Mt. Gox filed for bankruptcy after reporting large Bitcoin losses. Repayments later went ahead through a Japanese civil rehabilitation proceeding.
2. July 5, 2022 Voyager Digital, a crypto brokerage and lending company, filed for bankruptcy after suspending withdrawals.
3. July 13, 2022 Lending platform Celsius followed. Lending products are not the same as simple exchange custody.
4. November 11, 2022 FTX and affiliated companies filed for US Chapter 11 after a wave of withdrawals.
5. January 31, 2024 Celsius emerged from Chapter 11 and began carrying out its distribution plan.
6. July 31, 2026 FTX had scheduled a fifth distribution of about $900 million to eligible creditors, not a guaranteed full repayment for everyone.
7. October 2026 The Mt. Gox trustee extended the deadline for certain repayments from October 31, 2026 to October 31, 2027, without promising any individual payment date.

The Federal Reserve Bank of Chicago estimated about 1.87 million customers with positive claims at FTX, 975,521 at Voyager and 542,333 at Celsius. These are not necessarily different people across the platforms.

How is it decided whether your crypto comes back?

The key question is whether the customer is entitled to specific assets or has a claim for repayment against the company.

Custody and segregation of assets

In custody, the provider controls the keys. Segregation keeps customer assets separate from the company’s own, legally and/or operationally. A shared customer wallet (omnibus wallet) does not on its own mean that customer and company funds are commingled.

Bankruptcy estate and claims

The bankruptcy estate includes everything that falls under the proceeding. A secured claim rests on rights over specific collateral. An unsecured creditor has no such cover and may receive a pro rata share after priorities and costs are applied. An allowed claim is one accepted for distribution, not simply whatever the customer declares.

Custody and yield products

Crypto worth €5,000 held in identifiable, protected and legally segregated custody may be claimable as specific assets. By contrast, €5,000 lent out through an “earn” product may only create a claim against the borrower. The labels “wallet” and “earn” don’t settle the legal question on their own.

Valuation and recovery rate

In some proceedings, the value on the date of the bankruptcy filing (petition-date value) can determine the claim. The recovery rate and the haircut measure, respectively, the repayment and the loss relative to it. You always need to know which value you’re comparing against.

How does the process work in practice?

Repayment usually goes through a review of records, rights and claims, not simply a reopening of withdrawals.

1. Deposits are credited in the internal ledger. The crypto may be held in shared wallets or with a third-party custodian.
2. Theft, fraud, trading or lending losses, poor records or a wave of withdrawals create a problem. A withdrawal freeze is a warning sign, not proof of insolvency in itself.
3. A court or administrator examines the assets and liabilities. Companies in the same group may go through different proceedings.
4. Ownership, the contracting entity and the terms of each product are checked. The customer may need to file a claim, correct a balance and pass identity, tax or payment-details checks.
5. Available funds, asset sales and recoveries through the courts fund distributions in crypto, cash or another form. Later payments are possible, while costs reduce what is available.

How can a “full repayment” mean fewer Bitcoin?

Paying off a historical monetary claim doesn’t necessarily mean getting the original coins back.

The examples are not forecasts or universal rules. If the price of Bitcoin had fallen, the comparison would change. Celsius says it calculated claims in dollars based on asset prices as of July 13, 2022.

What are the benefits and the main pitfalls?

Easy trading and key management explain why people use exchanges, but they don’t remove counterparty risk.

The customer gets a single account, conversions between fiat currencies and crypto and, with some providers, help recovering access. But they remain exposed to provider or custodian failure, frozen access, legal disputes and price swings. Nor are stablecoins, which aim for a stable value, bank deposits: they carry issuer risk and the risk of losing their peg to the reference price.

Proof of reserves shows assets at a single point in time, not full liabilities, ongoing solvency or legal ownership. A big name, a license and an “insured” label don’t guarantee repayment.

Self-custody reduces your exposure to the exchange’s custody, but it shifts the responsibility to you. Lost private keys or seed phrases (recovery phrases), wrong addresses and malicious transactions can also cause losses.

What does MiCA protect in Greece?

The EU’s Markets in Crypto-Assets Regulation (MiCA) sets custody safeguards, not a guarantee of immediate or full repayment.

It entered into force on June 29, 2023. The rules for certain stablecoin issuers applied from June 30, 2024 and most of the rules for providers from December 30, 2024. The longest national transitional period ended on July 1, 2026. In Greece, Law 5193/2025, published on April 11, 2025, includes implementing measures and the allocation of supervisory powers.

We highlight the following:

• Article 70 requires protecting clients’ ownership rights, especially in insolvency, and preventing the provider from using their crypto for its own account.
• Article 75 requires records of positions, segregation of client crypto, including on the distributed ledger, and legal separation from the custodian’s estate in accordance with applicable law. It also sets liability for attributable losses under its conditions.
• We check the exact company and service in the ESMA register and with the competent national authority. MiCA doesn’t cover every activity; financial instruments in token form may fall under other rules.

Missing assets or legal disputes remain obstacles. There is no automatic cover from a bank deposit guarantee or from the compensation schemes for certain traditional investments. Cash held through an intermediary, e-money and crypto each need to be checked separately.

What records should a customer in Greece keep for a claim and for AADE?

Complete records help both with a claim and with assessing the tax treatment.

Keep account statements, terms, purchases valued in euros, fees, transfers, claims and distributions. Check deadlines from official sources: FTX warns that some unclaimed distributions may be forfeited if required steps aren’t completed. It also warns about fake claims websites and says it never asks you to connect a wallet.

On November 5, 2026, Reuters reported the approval of Greece’s 10% tax on crypto gains, with an annual exemption of up to €500 and implementation guidance still to come. An earlier report mentioned a start date of January 1, 2027 and no tax on crypto-to-crypto swaps themselves, but these points need to be confirmed in the text as passed. Likewise, the 15% rate on lending, liquidity provision and staking yields came from a consultation announcement, not a confirmed final rule.

The return of assets, the payment of a claim, a disposal and interest are not necessarily treated the same way. For losses, recoveries and tax returns filed with AADE (Greece’s Independent Authority for Public Revenue), you need a personalized review by a tax professional based on the final law and guidance.

Our view

We think the real question is “who holds what, under which contract?” A convenient app doesn’t answer the ownership question, and a promise of yield doesn’t explain the order of repayment. The above is general information, not personalized legal or tax advice.