Failed exchange FTX has settled with the Commodity Futures Trading Commission
- WBOYOriginal
- 2024-07-19 11:46:51738browse
As part of the deal, the company agreed to pay a $12.7 billion fine to the CFTC, court documents said. The deal also calls for $4 billion in restitution fees and $8.7 billion in damages, subject to court approval.
Failed crypto exchange FTX has settled a lawsuit with the Commodity Futures Trading Commission.
The Commodity Futures Trading Commission filed a lawsuit against FTX and its co-founder, Sam Bankman-Fried, in December 2022. The agency accused the defendants of violating the Commodity Exchange Act and misappropriating investor funds.
The complaint alleges that Bankman-Fried directed FTX executives to develop a scheme that allowed his other company, Alameda Research, to use the crypto exchange as a line of credit.
The settlement agreement calls for the company to pay a $12.7 billion fine to the CFTC, court documents said. The deal also includes $4 billion in restitution fees and $8.7 billion in damages, subject to court approval.
The CFTC did not seek a civil penalty against FTX. According to the regulator’s representatives, given the guilty pleas and convictions of FTX insiders, the debtors already faced a very significant potential liability to the agency.
The court will consider the settlement on Aug. 6. If the deal is approved, the company can begin the subsequent restructuring and debt repayment stage.
The CFTC lawsuit is one of several legal challenges FTX faces. The exchange is also being sued by the Securities and Exchange Commission and the Department of Justice.
FTX collapsed in November 2022 after it was revealed that Alameda had used the exchange's customer funds to make risky trades. The exchange filed for bankruptcy protection on Nov. 11, 2022.
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