U.S Court Approves $12.7 Billion Repayment Plan for FTX Creditors

Final approval has been granted for the $12.7 billion repayment to FTX creditors as part of the settlement with the US Commodity Futures Trading Commission (CFTC). This decision was made by a New York court for the now-defunct crypto exchange FTX and its sister trading business Alameda Research.

On August 7, a formal judgment was granted by United States District Judge Peter Castel regarding the $12.7 billion settlement agreement between FTX and Alameda, which concluded a 20-month-long case brought by the CFTC. No Civil Monetary Penalty

Additionally, on August 7, District Judge Castel gave final court permission. However, the lawsuit could not proceed until FTX and Alameda first agreed to the settlement on July 12. The commodities regulator decided not to pursue a civil monetary penalty. As a result, all $12.7 billion will be used to pay off FTX's creditors.

After founder Sam Bankman-Fried defrauded $8.7 billion from investors, FTX and Alameda both committed to repaying the money. Additionally, $4 billion was directed that they disgorge.

The ruling also prohibits FTX and Alameda Research from engaging in any transactions involving digital asset commodities. Furthermore, from "cheating or defrauding" clients, and from ever purchasing or selling such commodities on behalf of others.

Furthermore, after being taken over by bankruptcy specialist John Ray III, FTX designated the commodities regulator as the "most significant single creditor" in its current bankruptcy case.

In December 2022, the CFTC filed a lawsuit against Alameda Research, FTX, and its former CEO Sam Bankman-Fried. Accusing the company of engaging in fraudulent practices and misleading investors by advertising itself as a platform for digital commodities assets.