Summary:
- Repayment Order: A U.S. court has ordered bankrupt cryptocurrency exchange FTX to pay $12.7 billion in relief to its customers, as part of a settlement with the Commodity Futures Trading Commission (CFTC).
- 100% Recovery: FTX has committed to a bankruptcy liquidation plan that ensures customers will receive 100% recovery on their claims, based on the value of their accounts at the time of the exchange’s collapse in late 2022.
- CFTC Settlement: The CFTC agreement removes a potential obstacle to repayment, guaranteeing that the government’s lawsuit will not diminish the funds available for customer compensation.
In a landmark ruling, a U.S. court has ordered bankrupt cryptocurrency exchange FTX to pay $12.7 billion in relief to its customers, the Commodity Futures Trading Commission (CFTC) announced on Thursday. The order is part of a settlement between FTX and the CFTC, which ensures that customers affected by the exchange’s late 2022 collapse will receive full compensation for their losses.
FTX, which filed for bankruptcy after a dramatic collapse in 2022, has committed to a liquidation process that will repay customers 100% of their claims, based on the value of their accounts at the time of the bankruptcy filing. This settlement is a significant step toward resolving the legal and financial chaos that followed FTX’s collapse.
The CFTC’s agreement with FTX was crucial in removing a potential roadblock to customer repayment. Under the terms of the settlement, the CFTC has agreed not to collect any payments from FTX until all customers are fully repaid, including interest. This ensures that the government’s lawsuit will not reduce the funds available to FTX’s customers.
The settlement requires FTX to pay $8.7 billion in restitution and $4 billion in disgorgement. These funds will be used to further compensate victims of the exchange’s collapse, providing much-needed relief to those who suffered significant financial losses.
FTX’s founder, Sam Bankman-Fried, was sentenced to 25 years in prison earlier this year for stealing $8 billion from customers. He has since appealed the conviction. The court’s order for FTX to repay its customers marks a major milestone in the ongoing efforts to resolve the fallout from one of the most significant failures in the cryptocurrency industry.
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