FTX proposes $12.7 billion settlement deal with CFTC
If the proposed settlement is approved, FTX and associated debtors will receive dollar-for-dollar credit toward the restitution amount based on the amount they distribute in FTX.com and FTX.US customer claims and Alameda lender claims in the Chapter 11 cases
FTX has agreed to pay the CFTC $4 billion in disgorgement and $8.7 billion in restitution, minus amounts credited from other bankruptcy payments, according to a July 12 filing.
If the proposed settlement is approved, FTX and associated debtors will receive dollar-for-dollar credit toward the restitution amount based on the amount they distribute in FTX.com and FTX.US customer claims and Alameda lender claims in the Chapter 11 cases.
The debtors will also receive dollar-for-dollar credit for the disgorgement amount based on the amount they distribute toward the CFTC’s stipulated claim in the Chapter 11 cases.
FTX would only need to pay the stipulated disgorgement claim as it is set out in its eligible reorganization plan and within the limits of its available funds.
Under the agreement, the CFTC will not seek a civil monetary penalty and have no other claims against the debtors in the ongoing Chapter 11 cases.
The proposed settlement is not final. The CFTC’s Enforcement Division recommends the agreement for consideration. The division authorized FTX to file its motion based on the assumption that the regulator will approve the proposal before an Aug. 6 hearing.
Furthermore, the proposed settlement will only become final and take effect after FTX's eligible reorganization plan is confirmed.
