The ongoing legal battle has finally ended, with the defunct FTX and Alameda Research ordered to pay $12.7 billion to creditors as part of its settlement with the Commodity Futures Trading Commission (CFTC). The settlement received approval by a New York Judge Thursday.
The order is the legal end to the ongoing FTX saga that stained the crypto market. In late March, the firm’s former CEO, Sam Bankman-Fried, was sentenced to 25 years in prison for his role in the fraud scheme. As part of the settlement, both the former exchange and Alameda were barred from trading cryptos.
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FTX Settlement Approved as Exchange Will Pay $12.7 Billion to Creditors
FTX has long been a bane to cryptos progression. The fall of the former cryptocurrency exchange was a massive black mark on the industry. Moreover, it still has created regulatory uncertainty that threatens businesses in the United States to this day.
Yet, the ongoing saga has reached a critical end. Now defunct FTX and Alameda Research are ordered to pay $12.7 billion to creditors in a CFTC settlement, according to a recent filing. The consent order was approved by US District Judge Peter Castel. It did not include a financial civil penalty.
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However, it does include an interesting restriction on both entities. Indeed, the settlement says FTX and Alameda are unable to trade cryptos or act as intermediaries in the market. That aspect certainly crushes any perception that FTX could be brought back as an operational exchange.
The former crypto titan had filed for bankruptcy in 2022. It had misappropriated the use of billions of dollars of invested funds. The CFTC had filed a lawsuit against both, claiming that they were equally responsible for the fraud. That proved to be legal truth, based on Thursday’s settlement.