A U.S. court has ordered the bankrupt cryptocurrency exchange FTX to pay $12.7 billion in relief to its customers, as announced by the Commodity Futures Trading Commission (CFTC) on Thursday.
The order stems from a settlement between FTX and the CFTC, addressing the collapse of the exchange in late 2022.
FTX, once a prominent player in the crypto market, lured customers with promises of security and reliability. However, the exchange allegedly misappropriated customer deposits, using them for risky investments rather than safeguarding them. “FTX created the illusion of being a safe haven for crypto trading, only to exploit its customers’ trust,” said CFTC Chairman Rostin Behnam in a statement.
The repayment order is part of FTX’s bankruptcy liquidation plan, which aims to fully compensate customers whose assets were frozen during the exchange’s collapse. FTX has committed to ensuring that customers will recover 100% of their claims, based on the value of their accounts at the time of the bankruptcy filing.
The CFTC settlement removes a significant obstacle to this repayment, as the agreement stipulates that the government will not seek any payment from FTX until all customer claims are satisfied, including interest. This settlement includes $8.7 billion in restitution and $4 billion in disgorgement, funds that will be used to further compensate victims of the exchange’s failure.
