U.S. Judge Orders FTX and Alameda to Pay $12.7 Billion to Creditors

🚀 Stay Ahead with AltcoinDaily.co! 🌐

The legal battle from the Commodity Futures Trading Commission (CFTC) against defunct cryptocurrency exchange FTX and trading firm Alameda Research has come to a close after 20 months. As per a New York judge ruling, FTX and Alameda Research will have to pay $12.7 billion to creditors.

Differentiating the Payments

According to United States District Judge Peter Castel, $8.7 billion will be paid by FTX and Alameda Research as a “restitution obligation”. This will go to persons who suffered losses proximately caused by the violation of the Act and Regulations described in the Amendment complaint and the Consent Order.

BREAKING: FTX & ALAMEDA FINAL APPROVAL HANDED DOWN, ORDERED TO PAY BACK $12.7 BILLION TO FTX CREDITORS pic.twitter.com/kf3QlJVIuB

  🌟 Unlock Crypto Insights with AltcoinDaily.co! 💰

— Kyle Chassé (@kyle_chasse) August 8, 2024

Additionally, $4 billion payment will be made as a “disgorgement obligation” for gains received relating to the violations described in the Amendment complaint and the Consent Order.

No Civil Penalties, but Trading Ban Imposed

Notably, the ruling by Judge Castel did not include civil penalties on FTX or Alameda Research. However, it did ban both entities from trading digital assets and acting as intermediaries in the market. This marks a significant development for the former heavyweight crypto market maker.

 🦂 AltcoinDaily.co is your trusted source for the latest in crypto news and insights. 🚀

FTX had been investors’ attraction, recording remarkable successes until 2022 when the exchange filed for bankruptcy. The incident resulted in loss of billions of U.S. dollars in investors’ wealth. This prompted the CFTC to file a lawsuit against FTX and Alameda. The CFTC argued both entities committed fraud and misrepresentations by publicizing FTX as the digital commodity asset platform.

Fallout of Sam Bankman-Fried’s FTX Management

In May, Sam Bankman-Fried, founder of both companies, who had been sentenced to 25 years in prison and ordered to forfeit $11 billion in March commenced serving his jail time. Bankman-Fried had earlier been convicted on seven counts of fraud, conspiracy, and money laundering. He however maintained innocence, claiming FTX’s collapse occurred due to “poor legal advice” and market conditions.

Meanwhile, prior to this ruling by Judge Castel, Coinrise had reported that three groups lodge claims to the $11 billion in property left by Bankman-Fried, including crypto tokens, funds in banks and private jets.

As per a previous report, it would seem that the CTFC and other governmental bodies will have a slice from the $12.7 billion to creditors.

 🔍 Your Crypto News Hub: AltcoinDaily.co! 🌐