The collapsed crypto exchange FTX has reached a $12.7 billion settlement with the United States Commodity Futures Trading Commission (CFTC), concluding a lawsuit that has lasted for 19 months.
This settlement is now pending court approval, according to a filing from July 12.
“The Proposed Settlement is an integral and valuable component of the Debtors’ proposed chapter 11 reorganization plan,” the filing says. It highlights that this agreement settles ongoing disputes with a major creditor, avoids more legal costs and delays, and protects assets for creditor payouts.
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The agreed settlement includes $8.7 billion in restitution and $4 billion in disgorgement.
The filing emphasizes that the CFTC is FTX’s “most significant single creditor” in the Chapter 11 bankruptcy proceedings and states:
Given the conduct, guilty pleas, and convictions of the FTX Insiders, the Debtors face very substantial potential liability to the CFTC.
The CFTC initially filed the lawsuit against FTX, its former CEO Sam Bankman-Fried, and its affiliated trading firm Alameda Research in December 2022. The lawsuit accused the firm of fraud and misrepresenting FTX as a digital commodity asset platform.
The court hearing to approve the settlement is scheduled for August 6 in the Bankruptcy Court for the District of Delaware. It would represent a significant step in resolving FTX’s bankruptcy proceedings if approved.
On June 6, FTX also reached a settlement with the IRS, resolving a $24 billion tax dispute. This settlement will take effect once the company’s reorganization plan is approved by the court.
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.
