Defunct Exchange FTX Reaches $4B Settlement with CFTC
- FTX has settled with the CFTC.
- The settlement prioritizes creditor payouts over the CFTC’s allowed claim.
- US Bankruptcy Judge John Dorsey has yet to approve the settlement.
Sam Bankman-Fried ’s fallen crypto exchange , FTX, has agreed to a multibillion-dollar settlement with the U.S. Commodity Futures Trading Commission (CFTC), a court document filed Friday shows.
The agreement, pending the approval of US Bankruptcy Judge John Dorsey, marks a pivotal moment for FTX and its creditors after over two years of a fiery legal battle. It outlines a complex arrangement prioritizing creditor repayments over the CFTC’s claim.
Details of the $4B Settlement
Per the court document , the CFTC will be allowed to claim $4 billion against FTX for disgorgement. This is a significant reduction from the $52.2 billion initially sought by the regulator in disgorgement, restitution, and monetary civil penalties.
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The $4 billion claim has been subordinated, meaning it will be paid to the CFTC only after all other creditor claims and interests are settled. Additionally, all recoveries on the CFTC’s allowed claim shall be applied “only” to make supplemental payments to certain creditors under the Supplemental Remission Fund.
“As part of the Proposed Settlement, the CFTC and the Debtors would agree that the Supplemental Remission Fund will be available to customers of FTX.com and FTX US and to Alameda lenders who are not in the convenience classes,” the document read.The proposed settlement follows a recent District Court order that imposed a $4 billion disgorgement on FTX and awarded the exchange’s creditors $8.7 billion in restitution.
In addition to forestalling prolonged litigation for quicker creditor repayments, the provisional agreement seeks to bar the CFTC from imposing further civil monetary penalties, which would have reduced the recoveries available for creditors.
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Read how SBF still claims innocence from prison:
Sam Bankman-Fried Still Claims He’s Innocent From Prison
Stay updated on the Ripple vs. SEC case:
Ripple vs SEC Lawsuit: One Year Later, Crypto Awaits a Verdict
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