The settlement follows the collapse of FTX in November 2022, which caused significant turmoil in the cryptocurrency market.
A settlement between the Commodity and Futures Exchange Commission (CFTC), the defunct cryptocurrency exchange FTX and the sibling business Alameda Research has received approval from a judge in the United States.
Following the exchange’s collapse in November 2022, the creditors will receive a total of $12.7 billion from the insolvent exchange. The corporation’s collapse shook the cryptocurrency market causing the loss of assets worth billions of dollars.
FTX To Pay Creditors $12.7 Billion
After receiving consent from a judge in New York, the defunct cryptocurrency exchange FTX and Alameda Research will pay their creditors a total of $12.7 billion.
After a twenty-month-long litigation, the US regulator and the company reached a settlement. In the meantime, the corporation and its sister company, Alameda reached an agreement on the terms on July 12 while they waited for judicial approval.
Despite its initial attempt to return $8.7 billion to its creditors, the company ultimately had to pay an additional $4 billion. Since the entire amount will be used to reinstate creditors, it does not include any civil fines.
Furthermore, the court prohibits both businesses from trading crypto assets on behalf of third parties or individuals who are participating in digital asset transactions.
A 20-Month Dispute Ends
Following the protracted struggle over bankruptcy, users of digital assets have expressed their satisfaction with the resolution as a breath of fresh air. Charges of fraud and commingling of user cash led to FTX’s bankruptcy filing in November 2022.
The result was that creditors and investors were unable to access their assets, which in turn led to a decrease in market sentiment, which in turn stretched out the negative cycle.
The regulatory bodies overseeing the financial industry subsequently made allegations against Alameda Research, former CEO Sam Bankman-Fried, and numerous other company officials.
We added this to the list of lawsuits filed against cryptocurrency companies. The investigations revealed a number of things, including substantial payments to political campaigns and purchases of property.
In addition to serving a sentence of 25 years in jail, Bankman-Fried was also required to forfeit eleven billion dollars.
