A US court has ordered bankrupt cryptocurrency exchange FTX to pay $12.7 billion in financial relief to customers who suffered losses when the company went bankrupt in 2022.
In a new statement, the Commodity Futures Trading Commission (CFTC) says the order requires FTX to pay $8.7 billion in restitution and $4 billion in restitution to further compensate those who fell victim to the exchange’s fraudulent scheme .
In December 2022, the CFTC filed a fraud complaint against FTX, its founder Sam Bankman-Fried and former company executives, alleging that they embezzled customer funds for their own use and benefit.
The regulator says the order resolves the lawsuit against the exchange, but notes that the case is still pending for Bankman-Fried and former FTX directors Caroline Ellison, Gary Wang and Nishad Singh.
The order also requires FTX and its sister company Alameda to cooperate with the CFTC in its ongoing litigation. CFTC Chairman Rostin Behnam praised the development, but said more needs to be done.
“As I have been saying for years: this is just the tip of the iceberg. In the absence of digital asset legislation to fill regulatory gaps, entities will continue to operate in the shadows without these basic tools of proper regulation, amplifying their deceptive practices and continuing to defraud customers.”
The CFTC, in a related settlement approved by the Bankruptcy Court for the District of Delaware, has agreed not to pursue a civil monetary penalty against FTX and to subordinate its monetary claims to those of the victims.
In May, it was reported that FTX’s bankruptcy estate was estimated to have between $14.5 billion and $16.3 billion in proceeds by the end of September.
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