FTX and its subsidiary Alameda Research have received approval from a New York judge to repay $12.7 billion to their 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 Decision
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
Commodity Futures Trading Commission senior trial attorney Carlin R. Metzger and FTX’s CEO John J. Ray III have emphasized the importance of the settlement. "The Proposed Settlement is an integral and valuable component of the Debtors’ proposed chapter 11 reorganization plan,” they stated.
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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