U.S. Judge Orders FTX and Alameda to Pay $12.7 Billion!
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Written by
Yana Levkovich - Updated 2024-08-08 18:43:26
A New York judge has given official approval to a consent order on Wednesday, concluding a 20-month-long lawsuit brought by the Commodity Futures Trading Commission (CFTC).
This order mandates the now-defunct cryptocurrency exchange FTX and the trading firm Alameda Research to pay $12.7 billion to their creditors. United States District Judge Peter Castel granted this approval on August 7, as noted in a court filing.
The consent order does not impose civil penalties on FTX and Alameda. However, it does prohibit both entities from engaging in the trading of digital assets and from acting as intermediaries in the digital asset market. This ban is significant given that Alameda was once a major player in the crypto market.
FTX filed for bankruptcy towards the end of 2022, which resulted in the loss of billions of dollars for investors. In response, the CFTC initiated a lawsuit against FTX and Alameda, alleging that both entities engaged in fraudulent activities and made false representations by promoting FTX as a reliable digital commodity asset platform.
Sam Bankman-Fried, the founder of both FTX and Alameda, received a 25-year prison sentence in March. He was also ordered to forfeit $11 billion. This sentence came after he was convicted on seven counts, including fraud, conspiracy, and money laundering.
Bankman-Fried's legal troubles and the downfall of FTX have been closely watched by the cryptocurrency industry, highlighting the risks and regulatory challenges in this rapidly evolving market.
The case has drawn significant attention to the regulatory landscape of digital assets, underscoring the importance of transparency and accountability. The CFTC's actions against FTX and Alameda serve as a warning to other firms in the industry about the serious consequences of violating market regulations.
The outcome of this case may lead to stricter regulatory oversight and more rigorous enforcement actions in the future, as regulators seek to protect investors and maintain market integrity.
