FTX and its sister company, Alameda Research, have received final approval from a New York judge to repay $12.7 billion to creditors. This approval follows a long-standing lawsuit filed by the United States Commodity Futures Trading Commission (CFTC) against the now-defunct crypto exchange.
Court Approval
The approval comes as part of a resolution to a 20-month lawsuit from the CFTC. The settlement agreement includes $8.7 billion in restitution and $4 billion in disgorgement. Notably, the CFTC did not seek a civil monetary penalty.
Statements from Key Figures
The CFTC sued FTX, its former CEO Sam Bankman-Fried, and Alameda Research in December 2022. The lawsuit accused the firm of fraud and misrepresentation by marketing FTX.com as a digital commodity asset platform.
Impact on Creditors
The proposed reorganization plan promises a 118% return for 98% of the creditors, particularly those with claims under $50,000. This return is based on the US dollar value of asset prices at the time of FTX’s bankruptcy filing in November 2022. However, many creditors have expressed a preference for cryptocurrency payouts, considering the market’s 166% increase in market cap since the bankruptcy filing.
This settlement marks a major milestone in the resolution of one of the largest crypto lawsuits.
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