A US court has ordered bankrupt crypto exchange FTX to pay $12.7 billion (approximately Rs 1,06,572 crore) in damages to its customers, the Commodity Futures Trading Commission (CFTC) said on Thursday.
FTX lured customers with “the illusion that it was a safe and secure place to access crypto markets,” and then misused its customers’ funds to make risky investments of its own, CFTC Chairman Rostin Behnam said in a statement.
The repayment order is a settlement between the CFTC and the bankrupt crypto exchange, which has committed to a bankruptcy liquidation to repay customers whose deposits were frozen during the collapse in late 2022.
FTX has indicated that its clients will receive 100 percent of their claims against the company, based on the value of their accounts at the time the company filed for bankruptcy.
The CFTC agreement removes a potential roadblock to that repayment, and ensures that the government’s lawsuit against FTX will not reduce the funds available to its customers. The CFTC agreed not to collect any payments from FTX until all of its customers have been repaid, with interest.
The settlement with the CFTC requires FTX to pay $8.7 billion (approximately Rs 72,998 crore) in restitution and $4 billion (approximately Rs 36,079 crore) in reimbursements. This amount will be used to further compensate victims for losses they suffered during the exchange’s collapse.
FTX did not immediately respond to a request for comment.
Founder Sam Bankman-Fried was sentenced to 25 years in prison in March for stealing $8 billion (about Rs. 67,127 crore) from customers. He has appealed the conviction.
FTX has used its bankruptcy to settle with U.S. regulators and former business partners and to sell assets purchased with embezzled customer money, including real estate and investments in crypto and other technology companies.
FTX is currently seeking votes on its bankruptcy proposal, but is facing opposition from some customers who feel aggrieved by the decision to refund them based on the much lower cryptocurrency prices that will occur from November 2022. The vote is set to take place on August 16, and FTX plans to seek final approval for its wind-down plan on October 7.
© Thomson Reuters 2024
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
