US orders FTX, Alameda to pay $12.7 bn to victims

A US agency said it won a court order for a $12.7 billion judgment against FTX and affiliate in the wake of the scandal involving former chief Sam Bankman-Fried, shown in December 2022. Photo: David Dee Delgado / GETTY IMAGES NORTH AMERICA/Getty Images via AFP/File
Source: AFP

Failed cryptocurrency platform FTX Trading and affiliate Alameda Research must pay $12.7 billion to compensate customers and fraud victims under a consent order, US regulators announced Thursday.

A US court in New York ordered the payments in the wake of a massive fraud scheme perpetrated by ex-FTX leader Sam Bankman-Fried, said the Commodity Futures Trading Commission, which called the sum its largest ever recovery.

"FTX and Alameda made material misrepresentations and omissions to customers" in attesting to the security of customer funds that were in fact "misappropriated," the CFTC said in a statement.

The settlement resolves the CFTC's litigation against FTX, but the agency continues to seek restitution in agency cases involving Bankman-Fried and three other individual defendants.

In March, a US federal judge sentenced Bankman-Fried to 25 years in jail and $11 billion in forfeiture after a New York jury found him guilty following a lengthy trial.

Bankman-Fried grew FTX quickly into a global player in cryptocurrency before the firm collapsed spectacularly in November 2022.

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FTX said in May that it expects to return 100 percent of bankruptcy claim amounts plus interest, adding that it expects to pay between $14.5 and $16.3 billion.

Source: AFP