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The legal battle from the Commodity Futures Trading Commission (CFTC) against defunct cryptocurrency exchange FTX and trading firm Alameda Research has come to a close after 20 months. As per a New York judge ruling, FTX and Alameda Research will have to pay $12.7 billion to creditors.
<h2 id="b-differentiating-the-payments-b">Differentiating the Payments</h2>
According to United States District Judge Peter Castel, $8.7 billion will be paid by FTX and Alameda Research as a “restitution obligation”. This will go to persons who suffered losses proximately caused by the violation of the Act and Regulations described in the Amendment complaint and the Consent Order.
<blockquote class="twitter-tweet">
 BREAKING: FTX &amp; ALAMEDA FINAL APPROVAL HANDED DOWN, ORDERED TO PAY BACK $12.7 BILLION TO FTX CREDITORS <a href="https://t.co/kf3QlJVIuB" rel="noopener noreferrer nofollow">pic.twitter.com/kf3QlJVIuB</a>
 — Kyle Chassé (@kyle_chasse) <a href="https://twitter.com/kyle_chasse/status/1821429125258658109?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">August 8, 2024</a>
</blockquote>
Additionally, $4 billion payment will be made as a “disgorgement obligation” for gains received relating to the violations described in the Amendment complaint and the Consent Order.
<h2 id="b-no-civil-penalties-but-trading-ban-imposed-b">No Civil Penalties, but Trading Ban Imposed</h2>
Notably, the ruling by Judge Castel did not include civil penalties on FTX or Alameda Research. However, it did ban both entities from trading digital assets and acting as intermediaries in the market. This marks a significant development for the former heavyweight crypto market maker.
FTX had been investors’ attraction, recording remarkable successes until 2022 when the exchange filed for bankruptcy. The incident resulted in loss of billions of U.S. dollars in investors’ wealth. This prompted the CFTC to file a lawsuit against FTX and Alameda. The CFTC argued both entities committed fraud and misrepresentations by publicizing FTX as the digital commodity asset platform.
<h2 id="b-fallout-of-sam-bankman-fried-s-ftx-management-b">Fallout of Sam Bankman-Fried’s FTX Management</h2>
In May,<a href="https://thecoinrise.com/ftx-founder-sbf-trades-penthouse-for-prison-cell/" rel="noopener noreferrer nofollow"> Sam Bankman-Fried</a>, founder of both companies, who had been sentenced to 25 years in prison and ordered to forfeit $11 billion in March commenced serving his jail time. Bankman-Fried had earlier been convicted on seven counts of fraud, conspiracy, and money laundering. He however maintained innocence, claiming FTX’s collapse occurred due to “poor legal advice” and market conditions.
Meanwhile, prior to this ruling by Judge Castel,<a href="https://thecoinrise.com/triangular-tussle-three-rival-groups-battle-for-bankman-frieds-ftx-assets/" rel="noopener noreferrer nofollow"> Coinrise had reported that three groups lodge claims</a> to the $11 billion in property left by Bankman-Fried, including crypto tokens, funds in banks and private jets.
As per a previous report, it would seem that the<a href="https://thecoinrise.com/ftx-up-to-5b-in-us-government-claims-unveiled-amid-bankruptcy-proceedings/" rel="noopener noreferrer nofollow"> CTFC and other governmental bodies</a> will have a slice from the $12.7 billion to creditors.
The post <a href="https://thecoinrise.com/u-s-judge-orders-ftx-and-alameda-to-pay-12-7-billion-to-creditors/" rel="noopener noreferrer nofollow">U.S. Judge Orders FTX and Alameda to Pay $12.7 Billion to Creditors</a> appeared first on <a href="https://thecoinrise.com" rel="noopener noreferrer nofollow">TheCoinrise.com</a>.

U.S. Judge Orders FTX and Alameda to Pay $12.7 Billion to Creditors

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