- CoinStic
- Posts
- US Court Orders Bankrupt Crypto Exchange FTX To Pay $12,700,000,000 to Former Customers and Fraud Victims
US Court Orders Bankrupt Crypto Exchange FTX To Pay $12,700,000,000 to Former Customers and Fraud Victims
A US court has ordered bankrupt crypto exchange FTX to pay $12.7 billion in monetary relief to customers who suffered losses when the company collapsed in 2022.
In a new statement, the Commodity Futures Trading Commission (CFTC) says the order requires FTX to pay $8.7 billion in restitution and $4 billion in disgorgement to further compensate those who fell victim to the exchange’s fraudulent scheme.
In December 2022, the CFTC filed a fraud complaint against FTX, its founder Sam Bankman-Fried, and former company executives alleging that they misappropriated customer funds for their own use and benefit.
The regulator says that the order resolves its litigation against the exchange but notes the case is still pending for Bankman-Fried and former FTX executives Caroline Ellison, Gary Wang and Nishad Singh.
The order also requires FTX and its sister company Alameda to cooperate with the CFTC in its ongoing litigation. CFTC Chairman Rostin Behnam commends the development but says more needs to be done.
“As I have been saying for years, this is just the tip of the iceberg. In the absence of digital asset legislation to fill regulatory gaps, entities will continue to operate in the shadows without these basic tools of sound regulation, sharpening their deceptive practices and continuing to dupe customers.”
The CFTC has agreed in a related settlement approved by the Bankruptcy Court for the District of Delaware not to seek civil monetary penalty against FTX and to subordinate its monetary claims to those of the victims.
In May, it was reported that FTX’s bankruptcy estate estimated it would hold between $14.5 billion and $16.3 billion in proceeds by the end of September.
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Generated Image: Midjourney