Failed exchange FTX has settled with the Commodity Futures Trading Commission.
As part of the deal, the company agreed to pay a $12.7 billion fine to the CFTC, court documents said. The deal also calls for $4 billion in restitution fees and $8.7 billion in damages, subject to court approval.
The CFTC did not seek a civil penalty against FTX. According to the regulator’s representatives, given the guilty pleas and convictions of FTX insiders, the debtors already faced a very significant potential liability to the agency.
The court will consider the settlement agreement on Aug. 6. If the deal is approved, the company can begin the subsequent restructuring and debt repayment stage.
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What is known about the CFTC’s lawsuit against FTX
The CFTC filed the lawsuit against FTX and its co-founder, Sam Bankman-Fried, in December 2022. The agency accused the defendants of violating the Commodity Exchange Act and misappropriating investor funds.
The complaint alleged that Bankman-Fried directed FTX executives to develop a scheme allowing his other company, Alameda Research, to use the crypto exchange as a line of credit.
IRS claims for $24 billion
In June, FTX settled an IRS lawsuit. The department is expected to receive, at best, $885 million from the bankrupt FTX instead of the initially required $24 billion. The amount includes a priority of $200 million that the exchange must pay within 60 days after the proposed restructuring plan takes effect.
If funds remain for this purpose, the IRS will receive the remaining $685 million upon completion of FTX’s compensation payment to clients and creditors. The bankruptcy court must approve the settlement agreement.
While challenging the $24 billion claim, exchange representatives acknowledged the possibility of significant ta
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Author: Anna Kharton
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