A US District Court judge has approved a $12.7 billion settlement between FTX, Alameda Research, and the CFTC, concluding a lengthy lawsuit.
Points
- Judge approves $12.7 billion settlement between FTX, Alameda Research, and the CFTC.
- Settlement includes $8.7 billion in restitution and $4 billion in disgorgement.
- FTX and Alameda prohibited from engaging in digital asset commodities trading.
- FTX filed for bankruptcy in November 2022, revealing a reorganization plan in May 2023.
- Former FTX CEO Sam Bankman-Fried found guilty of fraud and sentenced to 25 years in prison.
Judge P. Kevin Castel of the United States District Court for the Southern District of New York has approved a $12.7 billion settlement agreement between defunct crypto exchange FTX, its associated trading firm Alameda Research, and the Commodity Futures Trading Commission （CFTC）. This decision brings an end to the 20-month-long lawsuit initiated by the CFTC in December 2022, which accused FTX and Alameda of fraud, causing customers to lose $8 billion.
The settlement figure, agreed upon in July 2024 after months of negotiations, includes $8.7 billion in restitution to those who suffered losses due to violations of the Commodity Exchange Act, and an additional $4 billion in disgorgement for gains obtained through the violations. The CFTC will receive nothing as long as FTX complies with its reorganization plan, ensuring that the full amount goes to creditors, subject to available funds.
FTX filed for bankruptcy protection in November 2022, with the debtors revealing their reorganization plan in May 2023. The plan aims to provide 98% of creditors with at least 118% of allowed claims, with specific provisions for creditors with claims below $50,000. However, some representatives of FTX’s largest creditor group have opposed the plan, arguing for payouts in kind rather than in dollar value.
As part of the settlement, FTX and Alameda are permanently prohibited from engaging in trading activities involving commodity interests, including digital assets like Bitcoin and Ether. They must also fully cooperate with the CFTC in any related investigations or proceedings.
Former FTX CEO Sam Bankman-Fried was found guilty of seven criminal counts, including wire fraud and conspiracy to commit wire fraud, and was sentenced to nearly 25 years in prison. The U.S. Securities and Exchange Commission has also charged Bankman-Fried with fraud.
解説
- The $12.7 billion settlement marks a significant resolution in one of the most high-profile cases in the crypto industry.
- The prohibition on trading digital asset commodities for FTX and Alameda underscores the regulatory emphasis on preventing future violations.
- The settlement provides substantial restitution to affected customers, aiming to restore some of the losses incurred during FTX’s collapse.
- The outcome of this case highlights the importance of regulatory oversight and the consequences of fraudulent activities in the cryptocurrency market.