What Happens When a Crypto Exchange Shuts Down Overnight?

How Does Resolution Work?

In the interest of the users, the government typically steps in and brings a resolution plan or proceeds with bankruptcy.

In Mt. Gox’s case, the exchange went through a bankruptcy tribunal which restored much of users funds, with many getting more than they lost in dollar terms i.e, $16 billion was recovered.

In the FTX case, the exchange got processed again by a bankruptcy tribunal where a capable team was set to address resolutions. FTX repaid approximately $7.6 billion as of late 2025.

It is noteworthy that these repayments are lesser in terms of crypto recoveries