Collapsed crypto company FTX has reached a settlement with the Commodity Futures Trading Commission (CFTC)—meaning the disgraced brand is now expected to pay $12.7 billion to resolve the lawsuit.
Documents from a bankruptcy court show that the now restructured digital asset behemoth, which went bust in November 2022, will pay $4 billion in disgorgement fees.
Another $8.7 billion will be paid in restitution fees, subject to court approval, according to the documents.
“The Proposed Settlement thus provides much-needed certainty as to the magnitude of the Allowed CFTC Claim and allows these Chapter 11 Cases to move swiftly toward resolution, thereby enabling the prompt distribution to the Debtors’ other creditors and customers,” the court filing read.
Regulators Are Powerless to Prevent Another FTX, Says CFTC Chairman
The Commodities Futures Trading Commission is in no better position now to prevent an FTX-level collapse than it was a year ago, Rostin Behnam, CFTC chair, said at a Georgetown University event this morning. “Nothing has changed, and we could be in a position where another FTX-type event happens,” Behnam said. He was on campus to speak at the Georgetown University Financial Markets Quality Conference. Behnam, an alum of the D.C. university, has attended the conference before alongside Sens. Cynt...
FTX was a major crypto brand that offered several services but mainly allowed customers to buy, sell, and bet on the future prices of digital coins and tokens.
It quickly went bankrupt in November 2022 after it became clear it did not have the funds that it said it did. This was largely due to the team behind the company using customer cash to make risky bets through sister company Alameda Research.
FTX co-founder and boss Sam Bankman-Fried was arrested soon after the company’s collapse. Earlier this year, he was sentenced to 25 years in prison on fraud and money laundering charges.
FTX Founder Sam Bankman-Fried Appeals 25-Year Jail Sentence
Disgraced FTX founder and convicted fraudster Sam Bankman-Fried has appealed his federal conviction and jail sentence, per a notice of appeal filed in the Southern District of New York (SDNY) court. Bankman-Fried's appeal comes after he was sentenced to 25 years in prison by U.S. District Court Judge Lewis Kaplan. The FTX founder was also ordered to repay $11 billion in forfeiture, after the Department of Justice successfully argued in court that he had siphoned more than $8 billion from the def...
Authorities—including FTX’s new management and bankruptcy specialists—have since been trying to claw back customer cash that disappeared when the exchange went bust.
Regulators had hit the disgraced digital asset behemoth with civil lawsuits for fraud. The CFTC was one such regulator, which first alleged in December 2022 that the crypto company had misappropriated customer funds.
Edited by Ryan Ozawa.
