FTX, Alameda Ordered To Pay $12.7B To Creditors By U.S. Judge
By Benzinga
A U.S. judge has ordered FTX Trading Ltd. and Alameda Research LLC to pay $12.7 billion in restitution and disgorgement to creditors.
What Happened: This ruling stems from a lawsuit filed by the Commodity Futures Trading Commission (CFTC) against the two entities, accusing them of committing fraud and making misrepresentations about the state of FTX’s operations.
The order states that FTX Trading and Alameda will be jointly liable for the $8.7 billion restitution obligation and the $4 billion disgorgement obligation.
These funds are to be distributed to affected customers and lenders through the ongoing FTX bankruptcy proceedings.
The court’s findings paint a damning picture of the relationship between FTX and Alameda.
The order reveals that Alameda had unfettered access to customer assets deposited on the FTX platform, which it used to fund its own trading and investment activities.
This practice was hidden from FTX customers, who were led to believe their funds were being properly segregated and custodied.
Also Read: EXCLUSIVE: What Tim Walz, Kamala Harris’s New VP Pick, Could Mean For The Crypto Industry
Why It Matters: The collapse of FTX in November 2022 sent shockwaves through the cryptocurrency industry, destroying billions of dollars in investor wealth.
The CFTC’s lawsuit and the subsequent court order underscore the gravity of the alleged misconduct and the importance of holding those responsible accountable.
As the FTX bankruptcy proceedings continue, the development is expected to provide some measure of relief to the platform’s creditors.
Interestingly, this news comes just ahead of Benzinga’s Future of Digital Assets event on Nov. 19, where industry experts will no doubt discuss the fallout from the FTX collapse and the steps needed to restore trust and confidence in the cryptocurrency market.
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Photo: Shutterstock
