FTX has reached a $12.7 billion settlement with the CFTC.
The exchange will pay $4 billion in disgorgement and $8.7 billion in restitution fees.
The CFTC is forgoing its own recovery to help investors recoup their money.
Defunct crypto exchange FTX, once valued at $32 billion at its peak and boasting over $10 billion in daily trading volume, has agreed to a $12.7 billion settlement with the Commodities and Futures Trading Commission (CFTC) over fraud charges. However, the settlement awaits approval from a Delaware judge.
The settlement agreement is a result of months of negotiations between the two entities and documents from a bankruptcy court confirms that the collapsed firm will pay $4 billion in disgorgement followed by $8.7 billion to be paid in restitution fees. The filing states that the agreement is “an integral and valuable component of the Debtors’ proposed chapter 11 reorganization plan,” adding:
“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 filing adds that the agreement will mitigate “a significant risk of diminution of the assets available for distribution to creditors.” Notably, the CFTC filed a lawsuit against FTX in 2022, targeting its former chief executive and co-founder Sam Bankman-Fried (popularly known as SBF), along with Alameda Research, for causing losses worth $8 billion to investors.
🔰ICYMI: FTX Reaches $12.7 Billion Settlement with CFTCBankrupt #crypto exchange #FTX has reached a tentative $12.7 billion settlement with the #CFTC over fraud charges. The settlement awaits approval from a Delaware judge. The CFTC had initially sought $52.2 billion. If…
— Coin Edition: Your Crypto News Edge ️ (@CoinEdition) July 17, 2024
The CFTC is forgoing its own recovery against FTX to help crypto investors and creditors recoup their investments, as pointed out by Andy Dietderich, a partner at Sullivan & Cromwell and lead counsel for the FTX Debtors, in a statement emailed to TheBlock.
SBF is currently behind bars and is facing a 25-year sentence. However, the disgraced crypto entrepreneur plans to appeal his sentencing, he revealed in an interview. It is also important to note that over $16 billion has been recovered from the FTX bankruptcy with approximately $12 billion in cash. Notably, the creditors of the defunct might lose $10 billion according to the exchange’s proposed repayment plan.
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