WEB3
by BSC News
August 8, 2024
This settlement resolves a 20-month lawsuit filed by the United States Commodity Futures Trading Commission (CFTC).
FTX and its sister company, Alameda Research, have received final approval from a New York judge to repay $12.7 billion to creditors. This approval follows a long-standing lawsuit filed by the United States Commodity Futures Trading Commission (CFTC) against the now-defunct crypto exchange.
The approval comes as part of a resolution to a 20-month lawsuit from the CFTC. The settlement agreement includes $8.7 billion in restitution and $4 billion in disgorgement. Notably, the CFTC did not seek a civil monetary penalty.
The CFTC sued FTX, its former CEO Sam Bankman-Fried, and Alameda Research in December 2022. The lawsuit accused the firm of fraud and misrepresentation by marketing FTX[dot]com as a digital commodity asset platform.
Commodity Futures Trading Commission senior trial attorney Carlin R. Metzger and FTX’s CEO John J. Ray III have emphasized the importance of the settlement.
"The Proposed Settlement is an integral and valuable component of the Debtors’ proposed chapter 11 reorganization plan,” they stated.
This settlement is seen as crucial for resolving ongoing litigation and disputes, avoiding further legal costs, and protecting the assets available for distribution to creditors.
The proposed reorganization plan promises a 118% return for 98% of the creditors, particularly those with claims under $50,000. This return is based on the US dollar value of asset prices at the time of FTX’s bankruptcy filing in November 2022.
However, many creditors have expressed a preference for cryptocurrency payouts, considering the market’s 166% increase in market cap since the bankruptcy filing.
This settlement marks a major milestone in the resolution of one of the largest crypto lawsuits.
Disclaimer
Disclaimer: The views expressed in this article do not necessarily represent the views of BSCNews. The information provided in this article is for educational and informational purposes only and should not be construed as investment advice. BSCNews assumes no responsibility for any investment decisions made based on the information provided in this article
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