CustodyStress
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Part of the CustodyStress archive of observed Bitcoin custody incidents
CS-01261

Platform bankruptcy — FTX (2024)

Constrained
Case description
On 8 May 2024, FTX filed a proposed reorganisation plan offering 98% of creditors 118% of the value of their claims in cash, based on November 2022 petition-date valuations. The plan was framed as the most comprehensive creditor recovery in US crypto bankruptcy history. However, many creditors expressed frustration: Bitcoin had risen approximately 260% since the petition date, and the cash-only repayment meant they would receive the dollar value of their holdings at the trough rather than the in-kind cryptocurrency they had deposited. Creditors who had deposited Bitcoin at $16,000 in late 2022 would receive that dollar value in cash, not Bitcoin at $60,000.
Custody context
Stress conditionVendor lockout
Custody systemExchange custody
OutcomeConstrained
DocumentationUnknown
Year observed2024
CountryUnited States
Structural dependencies observed
Institutional cooperation required
What this illustrates
Getting access back required help from an institution — and that help wasn't available. Whether full access was ultimately possible is unclear, but significant delay or outside intervention was involved.
Outcome interpretation
Access remained possible, but only with delay, dependence, or significant difficulty.
Source
Publicly Reported
Evidence type
News article
Evidence link
https://www.coindesk.com/policy/2024/05/08/nearly-all-ftx-creditors-will-get-118-of-their-funds-back-in-cash-estate-says-in-new-plan
Related cases involving vendor lockout
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170 cases involve vendor lockout 512 cases involve exchange custody View archive statistics →
This archive documents observed custody survivability failures. It does not attempt to document all Bitcoin losses or security incidents. Submit a case
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Framework references
Where Bitcoin Custody Intersects Legal and Fiduciary Authority
Where custody creates gaps in estate planning, fiduciary duty, and professional responsibility.
Professional Scope Boundary Matrix
What each professional or product covers, what they do not, and where gaps form between them.
The Independent Assessment Layer in Bitcoin Custody
How independent diagnostic layers emerge when multiple parties depend on shared infrastructure.
Terms guide
Outcome terms
Survives
Access remained possible under the reported conditions.
Constrained
Access remained possible, but only with delay, dependence, or significant difficulty.
Blocked
Access was not possible under the reported conditions.
Indeterminate
There was not enough information to determine the outcome.
Structural terms
Single-person knowledge
Recovery depended on information or capability held by one individual who was unavailable.
Institutional dependence
Recovery depended on a third-party institution or service that was inaccessible or uncooperative.
Documentation gap
Recovery depended on instructions that were missing, incomplete, or unclear.
Authority mismatch
The person with legal authority to act did not have operational access, or vice versa.
Original text
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