FTX and Alameda have agreed to repay $12.7 billion to creditors, per a court consent order that ends a 20-month lawsuit filed by the Commodities Futures Trading Commission (CFTC). This development marks a significant milestone in the FTX bankruptcy saga, which has seen billions of dollars in investor funds evaporate since the company filed for Chapter 11 bankruptcy in November 2022.
Judge Ends 20-Month FTX Case
US District Judge Peter Castel officially approved the consent order on Wednesday, mandating that FTX and Alameda repay creditors $12.7 billion. Interestingly, the New York court has decided not to impose a civil monetary penalty on the two firms. However, the order does include a prohibition against FTX and Alameda trading digital assets or acting as intermediaries in the market.
This ruling brings an end to the prolonged 20-month lawsuit initiated by the CFTC following FTX’s bankruptcy filing. Despite the resolution of this case, the consent order does not preclude other legal or equitable remedies that may be pursued against FTX or its associated defendants in future proceedings.
Sam Bankman-Fried’s Sentence
As this latest development unfolds, FTX founder Sam Bankman-Fried (SBF) is currently serving a 25-year prison sentence. Earlier this year, he was found guilty of seven counts of fraud, conspiracy, and money laundering. In addition to his prison term, the court ordered him to forfeit $11 billion, reflecting the massive scale of the financial misconduct associated with his tenure at FTX.
The Road Ahead
The agreement to repay $12.7 billion represents a significant step towards resolving the financial chaos left in the wake of FTX’s collapse. Creditors, many of whom faced significant financial losses, will be watching closely as the repayment process unfolds.
Meanwhile, the ban on FTX and Alameda from trading digital assets aims to prevent further market disruption and restore some level of stability to the sector.
While the consent order closes a major chapter in the FTX bankruptcy saga, the implications of this case will likely reverberate through the crypto industry for some time. The resolution highlights the ongoing challenges and vulnerabilities within the digital asset market, emphasizing the need for robust regulatory oversight and stringent security measures.
