FTX Ordered to Pay $12.7B in Settlement with CFTC
The post FTX Ordered to Pay $12.7B in Settlement with CFTC appeared on BitcoinEthereumNews.com.
FTX and Alameda Research receive approval to repay $12.7 billion to creditors. The CFTC waived civil monetary penalties to maximize creditor repayment. FTX and Alameda are permanently banned from trading digital asset commodities. A pivotal development in the ongoing FTX bankruptcy saga emerged as New York Judge P. Kevin Castel approved a consent order requiring the defunct crypto exchange and its sister company, Alameda Research, to pay $12.7 billion in restitution to defrauded investors. This ruling concludes a 20-month CFTC lawsuit triggered by FTX’s collapse during the 2022 crypto winter. The Commodity Futures Trading Commission (CFTC) had initiated legal action against FTX and Alameda, alleging fraud and misrepresentation. Both parties reached a settlement agreement on July 12, which received final court approval on August 7. The CFTC opted to waive a civil monetary penalty, ensuring the entire $12.7 billion will be directed towards repaying FTX creditors. The settlement mandated that FTX and Alameda repay $8.7 billion in restitution, with an additional $4 billion in disgorgement. The order also permanently barred both entities from trading digital asset commodities or acting as intermediaries in such transactions. Furthermore, both companies are prohibited from engaging in any unauthorized financial activities. Distribution of settlement funds will be handled through the ongoing FTX bankruptcy proceedings, with oversight provided by either the FTX CEO or a court-approved plan administrator. Additionally, regular reports on the disbursement of these funds will be provided to the CFTC to ensure compliance with the court’s directives. This settlement is a significant step in addressing the financial fallout from FTX’s collapse. Once a major player in the cryptocurrency industry, the company filed for bankruptcy in 2022, erasing billions of dollars in investor wealth. However, liquidating FTX’s assets to satisfy the settlement could impact the broader crypto market. Large-scale selling, similar to the Mt.…
Filed under: News - @ August 8, 2024 7:22 pm