The collapsed crypto exchange FTX has reached a $12.7 billion settlement with the United States Commodity Futures Trading Commission (CFTC) after a 19-month-long lawsuit. The settlement, pending court approval, includes $8.7 billion in restitution and $4 billion in disgorgement.
The filing from July 12 states that the settlement is a crucial part of FTX’s proposed chapter 11 reorganization plan. It settles ongoing disputes with a major creditor, avoids further legal costs and delays, and protects assets for creditor payouts.
The CFTC initially filed the lawsuit against FTX, its former CEO Sam Bankman-Fried, and its affiliated trading firm Alameda Research in December 2022, accusing them 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. This settlement, along with a separate $24 billion tax dispute settlement with the IRS, will play a significant role in resolving FTX’s bankruptcy proceedings.
Overall, this settlement marks a significant step towards resolving the legal issues surrounding FTX and paves the way for the company’s reorganization plan to move forward.
