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<p>A U.S. court has ordered the bankrupt cryptocurrency exchange FTX to pay $12.7 billion in relief to its customers, as confirmed by the Commodity Futures Trading Commission (CFTC) on Thursday as reported by <a href="https://www.reuters.com/technology/crypto-exchange-ftx-ordered-pay-127-bln-customers-us-cftc-says-2024-08-08/" class="ek-link" rel="noopener noreferrer nofollow">reuters</a>. This settlement marks a critical step in compensating the victims of FTX’s dramatic collapse.</p>
<h2 class="wp-block-heading" id="h-cftc-chairman-s-statement">CFTC Chairman’s Statement</h2>
<p>FTX lured customers with “an illusion that it was a safe and secure place to access crypto markets,” according to CFTC Chairman Rostin Behnam. However, the company allegedly misused customer deposits for its own risky investments, which contributed to its downfall.</p>
<h2 class="wp-block-heading" id="h-settlement-agreement-and-customer-impact">Settlement Agreement and Customer Impact</h2>
<p>Under the terms of the settlement, FTX has committed to repaying its customers 100% of their claims <a href="https://www.unlock-bc.com/122834/ftx-bankruptcy-cash-reimbursement-not-crypto/" class="ek-link" rel="noopener noreferrer nofollow">based on the value</a> of their accounts when the company filed for bankruptcy in late 2022. However, this means that many customers will receive payouts based on Bitcoin prices from that period, which ranged from $47,835 to $18,490. Given that Bitcoin’s current value is higher, customers stand to lose out on significant gains.</p>
<p>While this settlement ensures that customers are repaid, the compensation doesn’t reflect the present value of digital assets. Some customers might have been better off receiving their compensation in digital assets rather than cashing out at the lower values locked in during the bankruptcy. This situation highlights a recurring theme where house seem to have the upper hand once again.</p>
<h2 class="wp-block-heading" id="h-details-of-the-repayment">Details of the Repayment</h2>
<p>The CFTC settlement requires FTX to pay $8.7 billion in restitution and $4 billion in disgorgement, funds that will further compensate victims of the exchange’s collapse. Importantly, the CFTC has agreed not to collect any payment from FTX until all customers are repaid, with interest.</p>
<h2 class="wp-block-heading" id="h-bankruptcy-proceedings-and-founder-s-conviction">Bankruptcy Proceedings and Founder’s Conviction</h2>
<p>FTX is in the process of settling with U.S. regulators and former business partners and is liquidating assets purchased with customer funds. The company is also seeking votes on its bankruptcy proposal, with a final decision anticipated on October 7, 2024.</p>
<p>Meanwhile, FTX founder Sam Bankman-Fried, sentenced to 25 years in prison for stealing $8 billion from customers, has appealed his conviction.</p>
<p>Though the court’s order provides a path for victims to recover some of their losses, the reality is that they will likely receive much less than the current value of their assets, reinforcing the perception that the house often comes out ahead in such scenarios.</p>
<p>The post <a href="https://www.unlock-bc.com/126900/ftx-ordered-to-pay-12-7-billion/" rel="noopener noreferrer nofollow">FTX Ordered to Pay $12.7 Billion to Customers, U.S. CFTC Confirms</a> appeared first on <a href="https://www.unlock-bc.com" rel="noopener noreferrer nofollow">UNLOCK Blockchain</a>.</p>

FTX Ordered to Pay $12.7 Billion to Customers, U.S. CFTC Confirms

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