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After 19 months of legal battle, bankrupt cryptocurrency exchange FTX and the U.S. Commodity Futures Trading Commission (CFTC) have reached a $12.7 billion settlement.
This agreement still needs to be approved by the court. In December 2022, the CFTC sued the bankrupt exchange FTX, its former CEO Sam Bankman-Fried, and sister company Alameda Research for fraud.
The settlement
This settlement is a key component of FTX’s reorganization plan. John J. Ray III, CEO of FTX, and Carlin R. Metzger, attorney for the Commodity Futures Trading Commission (CFTC), both expressed satisfaction with the resolution.
“It resolves ongoing litigation and disputes with one of the largest creditors, avoids the cost and delay of further litigation, and reduces the risk of a reduction in available assets for distribution to creditors.”
The settlement includes $8.7 billion in refunds and $4 billion in profit disgorgement. Notably, the CFTC did not seek a civil penalty. But it will make more money available to creditors.
The refunds
FTX’s reorganization plan promises a 118 percent return for nearly all creditors with claims under $50,000. This is based on the value of assets at the time of the bankruptcy in November 2022. However, many creditors prefer a distribution in crypto assets, which would represent a 166 percent return.
Creditors currently have the opportunity to vote on how they will be paid. They have until August 16 to do so. On October 7, the U.S. bankruptcy judge will make a final decision on the matter.
The FTX fiasco is still a black page in crypto history. It probably always will be. With the settlement, there is finally a solution in sight where victims get their assets back. During the FTX disaster, almost $10 billion in customer assets went up in smoke.
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Source: https://newsbit.nl/ftx-bereikt-een-schikking-met-de-cftc-van-bijna-13-miljard/