FTX Bankruptcy Update: $12.7 Billion Payout Agreed

The court has finally issued the consent order in the FTX and Alameda cases, ending a longstanding lawsuit filed by the Commodities Futures Trading Commission (CFTC).

FTX filed for bankruptcy in November 2022, destroying billions of dollars worth of investor funds.

US District Judge Peter Castel officially approved the consent order on Wednesday, determining that FTX and Alameda will pay creditors $12.7 billion. Notably, the New York court does not pursue a civil monetary penalty. However, it prohibits the two firms from trading digital assets and acting as intermediaries in the market.

This development ends a 20-month-long lawsuit filed by the CFTC after FTX exchange’s Chapter 11 bankruptcy filing in 2022. Nevertheless, it does not limit or impair the ability of any other pursuit for a legal or equitable remedy against the exchange’s defendants in any other proceeding.

The regulator alleged that FTX and Alameda Research committed fraud and misrepresentations when publicizing the now-defunct exchange as the digital commodity asset platform. FTX creditor activist @Sunil_trades on X did not immediately respond to BeInCrypto’s request for comment. 

Read more: FTX Collapse Explained: How Sam Bankman-Fried’s Empire Fell

As this development breaks, FTX founder Sam Bankman-Fried (SBF) is serving a 25-year sentence. The court found him guilty of seven counts of fraud, conspiracy, and money laundering and compelled him to forfeit $11 billion earlier this year. An unreleased interview showed SBF is not a pushover in prison, having adopted a crew and sharing hot crypto tips with prison guards. 

The FTX token, FTT, has been down 1.4% since the Thursday session opened, following the broader market trend.

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