Crypto exchange FTX ordered to pay $12.7 billion to customers, US CFTC says

Crypto exchange FTX ordered to pay $12.7 billion to customers, US CFTC says

VoM News Desk | August 8, 2024 | 11:25 PM IST | Breaking News | Follow on Google News

Crypto exchange FTX ordered to pay $12.7 billion to customers, US CFTC says

Crypto exchange FTX ordered to pay $12.7 billion to customers, US CFTC says

-A U.S. court has ordered bankrupt cryptocurrency exchange FTX to pay $12.7 billion in relief to its customers, the Commodity Futures Trading Commission said on Thursday.

FTX drew customers in with “an illusion that it was a safe and secure place to access crypto markets,” then misappropriated their customer deposits to make its own risky investments, CFTC Chairman Rostin Behnam said in a statement.

The repayment order implements a settlement between the CFTC and the bankrupt crypto exchange, which has committed to a bankruptcy liquidation that will repay customers whose deposits were locked during its late 2022 collapse.

FTX has said that its customers will receive 100% recovery on their claims against the company, based on the value of their accounts at the time it filed for bankruptcy.

The CFTC agreement resolves a potential roadblock to that repayment, ensuring that the government’s lawsuit against FTX will not reduce the funds available to its customers. The CFTC agreed not to collect any payment from FTX until all its customers are repaid, with interest.

The CFTC settlement requires FTX to pay $8.7 billion in restitution and $4 billion in disgorgement, which will be used to further compensate victims for losses suffered during the exchange’s collapse.

FTX did not immediately respond to a request for comment.

Its founder Sam Bankman-Fried was sentenced in March to 25 years in prison for stealing $8 billion from customers. He has appealed the conviction.

FTX has used its bankruptcy to reach settlements with U.S. regulators and former business partners and to sell assets that had been purchased with misappropriated customer funds, including real estate and investments in crypto and other tech companies.

FTX is currently soliciting votes on its bankruptcy proposal but faces opposition from some customers who feel short-changed by the decision to repay them based on much-lower cryptocurrency prices from November 2022. Votes are due on Aug. 16, and FTX intends to seek final approval of its wind-down plan on Oct. 7.

This article was generated from an automated news agency feed without modifications to text.

VoM News Desk

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