A US court has ordered the insolvent crypto exchange FTX to pay $12.7 billion in financial compensation to customers who suffered losses as a result of the company’s bankruptcy in 2022.
In a new statement, the Commodity Futures Trading Commission (CFTC) said the order requires FTX to pay $8.7 billion in restitution and $4 billion in profit disgorgement to further compensate those who fell victim to the exchange’s fraudulent scheme.
In December 2022, the CFTC filed a fraud complaint against FTX, its founder Sam Bankman-Fried, and former company executives, alleging that they misappropriated customer funds for their own use and benefit.
The regulator says the order resolves its litigation against the exchange, but notes that the case of Bankman-Fried and former FTX executives Caroline Ellison, Gary Wang and Nishad Singh is still pending.
The order also requires FTX and its sister company Alameda to cooperate with the CFTC in their ongoing legal proceedings. CFTC Chairman Rostin Behnam praises the development but says more needs to be done.
“As I have been saying for years, this is just the tip of the iceberg. Without digital asset legislation that closes the regulatory gaps, companies will continue to operate in secret, without these fundamental tools of sound regulation, escalate their fraudulent practices and continue to defraud customers.”
In a settlement approved by the Bankruptcy Court for the District of Delaware, the CFTC agreed not to seek civil penalties against FTX and to subordinate its monetary claims to those of the victims.
In May, it was reported that FTX’s bankruptcy estate would estimate proceeds of between $14.5 billion and $16.3 billion by the end of September.
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