The Sam Bankman-Fried founded FTX and its sister company Alameda Research have been ordered by a New York judge to pay $12.7 billion to creditors, effectively ending a nearly two years long lawsuit from the Commodities Futures Trading Commission (CFTC).
FTX, Alameda Research Ordered To Pay Billions To FTX Creditors
The settled amount was originally decided on last month, but a Wednesday August 7 consent order approved by Judge P. Kevin Castel of the United State District Court for the Southern District of New York has officially finalized the deal.
$8.7 billion of the settlement agreement will go to “persons who sustained losses” as restitution for the crypto companies’ violation of the Commodity Exchange Act, while an additional $4 billion headed the creditors’ way “for gains received in connection with the violations described.”
FTX and Alameda Research have also been banned from trading digital assets, though, the future of each entity appears unclear.
However, per a May 2024 press release, the estate’s current bankruptcy reorganization plan expects that 98% of all FTX creditors will receive 118% of their allowed claims.
“We are pleased to be in a position to propose a chapter 11 plan that contemplates the return of 100% of bankruptcy claim amounts plus interest for non-governmental creditors,” Chief Executive Officer and Chief Restructuring Officer of FTX, John J. Ray III, said.
Former Sam Bankman-Fried Associates Await Sentencing
The doomed crypto exchange originally filed for bankruptcy in November 2022 following a whirlwind collapse that saw $8 billion of customer funds misappropriated by Bankman-Fried and several of his associates.
Bankman-Fried was sentenced to 25 years in federal prison for orchestrating the FTX fraud and has been ordered to pay $11 billion to victims of the multi-billion dollar crypto scheme.
Former CEO of FTX Digital Markets, Ryan Salame, was the first executive from the crypto exchange outside of Bankman-Fried to be sentenced on criminal charges stemming from his time at FTX following his sentencing in May.
However, following a recent dog attack, Salame’s prison surrender date has been pushed back from August to October so that he can undergo medical treatment.
“Got bit in the face by a dog (my fault, not the dog’s) and all I can think is I hope this surgeon isn’t a democrat who knows I’m a republican,” a June 29 post from the former crypto executive read.
Meanwhile, several former associates of SBF, including FTX director of engineering Nishad Singh, FTX chief technology officer Gary Wang, and Alameda Research CEO Caroline Ellison are slated to be sentenced for their respective roles in the scheme some time in the near future, though dates are not immediately clear.
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