Court Concludes 20-Month FTX and Alameda Legal Battle with Consent Order
In a significant development, a US District Court has officially concluded the longstanding lawsuit involving FTX and Alameda Research. Judge Peter Castel approved the consent order on Wednesday, marking the end of a 20-month legal saga initiated by the Commodities Futures Trading Commission (CFTC).
FTX, once a prominent cryptocurrency exchange, filed for Chapter 11 bankruptcy in November 2022, leading to the loss of billions in investor funds. Under the terms of the consent order, FTX and Alameda are required to pay $12.7 billion to creditors. Interestingly, the New York court chose not to impose a civil monetary penalty but has permanently banned both entities from trading digital assets or acting as intermediaries in the market.
This order resolves the lawsuit brought by the CFTC, which accused FTX and Alameda of fraud and misrepresentation, particularly regarding FTX’s portrayal as a digital commodity asset platform. However, the consent order does not prevent other legal actions from being pursued against the defendants in separate proceedings.
As news of this resolution emerges, FTX’s founder, Sam Bankman-Fried (SBF), continues to serve a 25-year prison sentence. Earlier this year, he was convicted on seven counts of fraud, conspiracy, and money laundering, resulting in an $11 billion forfeiture. Despite his circumstances, an unreleased interview reveals that SBF has managed to adapt to prison life, even forming alliances and offering cryptocurrency advice to prison guards.
Meanwhile, the (FTT) has seen a slight decline, down 1.4% since Thursday’s market session opened, reflecting broader market trends.
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