CDS Crypto News CFTC and FTX have come to terms on a $12.7 billion settlement, contingent upon court sanction
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CFTC and FTX have come to terms on a $12.7 billion settlement, contingent upon court sanction

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CFTC and FTX have come to terms on a $12.7 billion settlement, contingent upon court sanction

CFTC and FTX- Subject to court review, FTX and the CFTC have settled for $12.7 billion

CFTC and FTX– The bankrupt cryptocurrency exchange FTX and the United States commodities regulator have agreed to a $12.7 billion settlement, marking the resolution of a 19-month-long lawsuit.

This agreement follows extensive negotiations and now awaits court approval, according to a filing released on July 12.

The proposed settlement is a crucial and valuable part of the Debtors’ chapter 11 reorganization plan, stated Carlin R. Metzger, senior trial attorney at the Commodity Futures Trading Commission (CFTC), and FTX’s CEO John J. Ray III. It resolves ongoing litigation and disputes with one of the largest creditors, avoids the costs and delays of further legal battles, and reduces the risk of reducing the assets available for distribution to creditors.

The CFTC had filed a lawsuit in December 2022 against FTX, its former CEO Sam Bankman-Fried, and FTX’s sister trading firm Alameda Research, alleging fraud and misrepresentation in promoting FTX.com as a digital commodity asset platform.

CFTC and FTX have come to terms on a $12.7 billion settlement, contingent upon court sanction

Under the settlement agreement, FTX will pay $8.7 billion in restitution and $4 billion in disgorgement.

FTX Creditors Consider Cryptocurrency Payouts Amid Proposed Reorganization

FTX’s proposed reorganization plan aims to provide a 118% return to 98% of its creditors, who hold claims under $50,000 based on asset values in US dollars at the time of FTX’s bankruptcy filing in November 2022.

However, many creditors of FTX have indicated a preference to receive cryptocurrency as payment, taking into account the market’s 166% increase in market capitalization since FTX filed for bankruptcy.

Currently, creditors are voting on their preferred method of payout, with a deadline of August 16. US Bankruptcy Court Judge John Dorsey is expected to make a final decision on October 7.

For the latest in crypto updates, keep tabs on Crypto Data Space.

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