Failed FTX exchange to distribute $12.7B in settlement with CFTC
The post Failed FTX exchange to distribute $12.7B in settlement with CFTC appeared on BitcoinEthereumNews.com.
The US Commodities Futures Trading Commission (CFTC) reached an agreement with the FTX exchange. The clients of the failed investment platform will be compensated with $12.7B. FTX Trading Ltd. and Alameda Research LLC will compensate their creditors with $12.7B, after a settlement with the US CFTC. The settlement includes $8.7B in restitution and $4B in disgorgement to compensate the victims of losses. The CFTC will not retain the disgorgement payment, but instead use it to cover creditor losses. There is no official schedule for repaying customers. Holders of FTX funds must be aware of potential scams, especially malicious pages that require the connection of a wallet. FTX caused massive repercussions on the crypto market after unraveling in 2022. The indirect losses were much bigger, as they caused other investment funds to crash. The FTX collapse also precipitated the fall of Three Arrows Capital and caused a deep cut to the value of Solana (SOL). The recent compensation requirement will not end all FTX legal procedures, as more holdings and wallets of the former exchange were investigated. The CFTC was concerned with the main fraud of FTX – the commingling of assets with Alameda Research, and the allocation to those assets to risky tokens and NFT. “FTX used age-old tactics to create an illusion that it was a safe and secure place to access crypto markets. But the basic regulatory tools, like governance, customer protections, and surveillance that exist to identify misconduct and ultimately prevent collapse, were simply not there,” said CFTC Chairman Rostin Behnam. FTX not only used depositor funds, but tapped other crypto lenders for loans, adding to the contagion. The CFTC agreed to distribute all remaining FTX funds to creditors, instead of retaining fines for financial crimes. The distribution of funds to creditors will conclude the case against…
Filed under: News - @ August 9, 2024 4:26 pm