FTX and Alameda ordered to pay $12.7 billion in fraud case settlement CFTC announced in a news release.
The Commodity Futures Trading Commission announced in a news release that a court has ordered FTX and its affiliate, Alameda Research, to pay $12.7 billion to consumers and victims of their fraud.
FTX Ordered to Pay $12.7 Billion in CFTC Fraud Settlement
A consent order that terminated a CFTC litigation that was initiated in December 2022 was approved by US District Judge Peter Castel of the Southern District of New York.
$8.7 billion in restitution and $4 billion in disgorgement comprise the sum, which will be utilized to provide additional compensation to victims for the losses they have sustained as a consequence of the extensive FTX fraud.
“CFTC Chairman Rostin Behnam stated that FTX employed conventional strategies to create the illusion that it was a secure and reliable platform for accessing cryptocurrency markets.” “However, the fundamental regulatory instruments, including governance, customer protections, and surveillance, which are designed to detect misconduct and ultimately avert collapse, were absent.”
In a related settlement that was approved by the Bankruptcy Court for the District of Delaware, the CFTC agreed to defer its monetary claims to those of victims of the FTX fraud scheme and to refrain from pursuing a civil monetary penalty against FTX.
In late 2022, FTX experienced a run on customer deposits that resulted in the disclosure of its fraudulent activities. The company had taken customer funds, mixed them with its own, and spent the money on real estate, celebrity endorsements, and political influence.
In March, a federal magistrate for the Southern District of New York sentenced FTX founder Sam Bankman-Fried to 25 years in prison, citing the “brazenness” of his fraud, according to DL News.
