FTX, Alameda Ordered to Pay $12.7B to Creditors by U.S. Judge

As a researcher who has closely followed the crypto market for several years, I can say that the recent court decision against FTX and Alameda Research is a significant milestone in the regulation of digital assets. The $12.7 billion payment to creditors is a step towards restoring investor trust, but it’s important to remember that this doesn’t erase the damage caused by the collapse of FTX.

The now-defunct cryptocurrency platform FTX and trading firm Alameda Research have been given approval by a New York court to pay a staggering $12.7 billion to their creditors, as per a consent order that was officially finalized on Wednesday. This puts an end to a 20-month legal battle initiated by the Commodity Futures Trading Commission (CFTC).

On August 7, United States District Judge Peter Castel granted approval (as indicated by records). This decision didn’t involve requesting a monetary penalty in a civil case.

As someone who has been closely following the cryptocurrency market for several years now, I find the recent development surrounding FTX and Alameda very concerning. Having witnessed the rapid rise and fall of numerous crypto projects in this volatile industry, I have learned to be cautious when it comes to trusting these entities with my hard-earned money. The fact that an organization once considered a major player in the market has been banned from trading digital assets and acting as intermediaries is a clear signal that something went terribly wrong. While I can’t predict the future, I believe it’s essential for investors to exercise extreme caution when dealing with any crypto-related businesses, especially those involved in such significant regulatory actions.

1. In December 2022, FTX sought bankruptcy protection, wiping out billions of dollars in investor assets. Later on, the Commodity Futures Trading Commission (CFTC) initiated a lawsuit against FTX and Alameda, asserting that they had deceived investors by falsely promoting FTX as a reliable platform for digital commodities, alleging fraud and misrepresentation.

In March, Sam Bankman-Fried, the founder of two companies, received a sentence of 25 years imprisonment and was instructed to forfeit an astounding $11 billion. Previously, he had been found guilty on seven charges including fraud, conspiracy, and money laundering.

(Omkar Godbole contributed reporting.)