The Commodities Futures Trading Commission announced on Thursday that bankrupt cryptocurrency exchange FTX has been ordered by a US court to provide $12.7 billion in relief to its customers.
According to a statement from CFTC Chairman Rostin Behnam, FTX “fooled consumers into the illusion that it was a safe and secure place to access the crypto markets,” then stole their money and placed their own high-risk trades. take
The reimbursement order is the result of an agreement reached by the CFTC and the insolvent cryptocurrency exchange. The exchange has promised to refund customers whose deposits were frozen after the bankruptcy filing in late 2022.
According to FTX, clients who file claims against the company will get 100% of their money back, depending on the value of their accounts at the time the company files for bankruptcy.
By addressing a potential barrier to such compensation, the CFTC settlement guarantees that government litigation against FTX will not reduce the amount available to its customers. The CFTC agreed to stop receiving money from FTX until all of its clients were paid back, plus interest.
The $8.7 billion in restitution and the $4 billion that FTX is required to pay as part of the CFTC settlement will be used to further compensate victims of losses after the exchange’s closure.
A request for comment from FTX was not immediately responded to.
The company’s founder, Sam Bankman Freud, was sentenced to 25 years in prison in March for embezzling $8 billion from clients. He filed an appeal against the decision.
Through its bankruptcy, FTX has been able to liquidate assets that were obtained from ill-gotten client cash, including real estate, cryptocurrency, and other tech ventures, as well as US regulators and former business partners. To settle with
FTX’s bankruptcy plan is currently being voted on, although some users are against the plan as they believe it would be unfair to them based on the significant decline in cryptocurrency prices starting in November 2022. has been treated. Voting is scheduled for August 16; On October 7, FTX plans to request final approval of its wind-down plan.
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