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The defunct crypto exchange FTX and trading company Alameda Research have been ordered to pay $12.7 billion to creditors, according to a recent ruling by U.S. District Judge Peter Castell in New York.
The ruling ends a 20-month lawsuit brought by the Commodity Futures Trading Commission (CFTC) against the two companies.
Judge Castell’s August 7 approval marks the end of the legal proceedings, with no civil monetary penalties imposed. However, the consent order prohibits FTX and Alameda from trading digital assets or acting as market intermediaries. This decision follows FTX’s bankruptcy filing in late 2022, which resulted in significant financial losses for investors.
The CFTC accused FTX and Alameda of engaging in fraudulent activities and making false statements about FTX being a credible platform for digital commodity assets. This action was part of a broader effort to hold the companies accountable for their actions.
In March, Sam Bankman-Fried, founder of FTX and Alameda, was sentenced to 25 years in prison and ordered to pay $11 billion in restitution. Multiple charges were brought against him, including fraud, conspiracy, and money laundering, and he was convicted on seven counts related to those crimes.
This ruling provides some closure to the cases of creditors affected by the FTX and Alameda bankruptcies and marks significant progress in the ongoing efforts to address the impact of the companies’ bankruptcies.