FTX and Alameda Research are to pay $12.7B to creditors as per a New York judge's order, banning them from trading digital assets without civil penalties.
In a significant ruling, FTX and Alameda Research have been ordered to pay $12.7 billion to creditors following a consent order approved by a New York judge. The decision marks the conclusion of a 20-month lawsuit filed by the Commodity Futures Trading Commission (CFTC) against the defunct crypto exchange and its associated trading firm.
Key Points:
Court Ruling: FTX and Alameda Research must pay $12.7 billion to creditors, as per a consent order approved by U.S. District Judge Peter Castel.
Trading Ban: The order prohibits FTX and Alameda from trading digital assets or acting as intermediaries in the market.
No Civil Penalties: The consent order does not impose additional civil penalties on the firms.
Background: FTX filed for bankruptcy in late 2022, leading to substantial investor losses. The CFTC sued the firms for fraud and misrepresentation.
Legal Consequences: Founder Sam Bankman-Fried was sentenced to 25 years in prison and ordered to forfeit $11 billion for fraud, conspiracy, and money laundering.
The court's decision to enforce a $12.7 billion payout and ban trading activities for FTX and Alameda Research marks a crucial step towards resolving the fallout from their collapse. This ruling aims to provide some restitution to creditors while permanently removing the firms from the digital asset market.
Source: Coindesk
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