In a major development in the ongoing saga of the FTX collapse, a New York judge has ordered FTX and its sister company, Alameda Research, to cough up $12.7 billion to their creditors. This decision closes the chapter on a 20-month-long lawsuit brought by the Commodity Futures Trading Commission (CFTC), marking a significant moment in the fallout from FTX’s spectacular downfall.
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No Civil Penalties, But a Ban on Trading
What’s interesting about this ruling is that it doesn’t impose any civil penalties on FTX or Alameda. Instead, the focus is squarely on financial restitution. The companies are now barred from trading digital assets and acting as intermediaries in the market—essentially shutting the door on any future operations in the crypto space. This move is seen as an attempt to prevent further damage from what has already been one of the most dramatic implosions in crypto history.
The Fallout from FTX’s Bankruptcy
FTX’s bankruptcy in late 2022 left a trail of financial devastation, with billions of dollars vanishing from the portfolios of investors and creditors. The CFTC had accused FTX and Alameda of fraud, alleging that they misrepresented the capabilities of the platform, which ultimately led to its collapse. Sam Bankman-Fried, the founder of both companies, has already been sentenced to 25 years in prison for his role in the fiasco, adding another layer to this complex and cautionary tale.
What’s Next?
With FTX and Alameda now effectively out of the game, the $12.7 billion payment is expected to go toward compensating those who were affected by the collapse. How this money will be distributed remains a hot topic among industry observers.
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