FTX, a bankrupt cryptocurrency exchange, and the United States Commodities Futures Trading Commission (CFTC) have agreed to a $12.7 billion settlement. This agreement resolves a 19-month lawsuit. The settlement follows months of negotiations and now awaits court approval, as shown in a July 12 filing.

Settlement Includes Restitution

The CFTC sued FTX, its former CEO Sam Bankman-Fried, and FTX’s sister trading firm Alameda Research in December 2022. The lawsuit claimed the firm committed fraud and made misrepresentations by marketing FTX.com as a digital commodity asset platform.

The settlement Settlement Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Read this Term agreement includes $8.7 billion in restitution and $4 billion in disgorgement. The CFTC did not seek a civil monetary penalty. FTX acknowledged, “Given the conduct, guilty pleas, and convictions of the FTX Insiders, the Debtors face very substantial potential liability to the CFTC.” The commodities regulator is the “most significant single creditor" in Chapter 11 bankruptcy cases, FTX added.

“The Proposed Settlement is an integral and valuable component of the Debtors’ proposed chapter 11 reorganization plan,” said Commodity Futures Trading Commission senior trial attorney Carlin R. Metzger and FTX’s CEO John J. Ray III. “It resolves ongoing litigation and disputes with one of the largest creditors of the Debtors, avoids the cost and delay of further litigation, and mitigates a significant risk of diminution of the assets available for distribution to creditors.”

FTX and CFTC agree to $12.7 billion settlement following months of negotiations https://t.co/18sLFikd7Y

— The Block (@TheBlock__) July 16, 2024

Settlement Hearing Scheduled August 6

A hearing on the settlement is set for August 6 in the Bankruptcy Bankruptcy Bankruptcy or insolvency constitutes a legal term and refers to being unable to repay debts. A business and a person can declare bankruptcy. When a person or company claims bankruptcy, it is described as a voluntary bankruptcy, and when your debtors force you into bankruptcy, it is referred to as involuntary. A voluntary bankruptcy occurs when the debtor or borrower, the party that owes the money files with the courts. Involuntary bankruptcy happens when your credits file a petition with the co Bankruptcy or insolvency constitutes a legal term and refers to being unable to repay debts. A business and a person can declare bankruptcy. When a person or company claims bankruptcy, it is described as a voluntary bankruptcy, and when your debtors force you into bankruptcy, it is referred to as involuntary. A voluntary bankruptcy occurs when the debtor or borrower, the party that owes the money files with the courts. Involuntary bankruptcy happens when your credits file a petition with the co Read this Term Court for the District of Delaware. FTX’s proposed reorganization plan would see a 118% return for 98% of the creditors with claims under $50,000, based on the US dollar value of asset prices at the time of FTX’s bankruptcy filing in November 2022.

Many FTX creditors have expressed a preference for a cryptocurrency payout in-kind, considering the market’s 166% increase in market cap since FTX’s bankruptcy filing. Creditors are currently voting on their preferred payout method. They have until August 16 before US Bankruptcy Court Judge John Dorsey makes a final decision on October 7.