FTX has settled with the United States Commodity Futures Trading Commission (CFTC), subordinating the $4 billion claim to creditor claims plus interest.
According to official documents, payments to the CFTC will go to the Supplemental Remission Fund. This fund ensures that after interest and all creditors are paid, any remaining funds will be directed to adversely affected crypto holders, provided funds are available.
FTX Settlement with CFTC Prioritizes Creditor Claims and Crypto Holder Recoveries
Judge Kaplan of the District Court ordered $4 billion in disgorgement and $8.7 billion in restitution to creditors. Creditors with crypto were particularly harmed, making supplemental recoveries from funds otherwise payable to the CFTC appropriate. Debtors will receive a dollar-to-dollar credit against the disgorgement order.
More than 200 FTX victims sent Victim Impact Statements to Judge Kaplan, highlighting the settlement’s impact. Despite media reports suggesting FTX customers are 100% whole under the plan, Judge Kaplan, the CFTC, and the government recognized that crypto holders were not whole at petition date prices.
In related proceedings, former FTX executives Gary Wang and Nishad Singh, integral to the case involving CEO Sam Bankman-Fried, have pleaded guilty and cooperated with prosecutors. Wang is scheduled for sentencing on November 20, while Singh’s sentencing is set for October 30, reflecting ongoing legal developments within the company.
FTX Losses Force Yield App To Fold
Yield App, a crypto investment platform headquartered in Seychelles, abruptly announced on June 28 that it would cease all operations. This decision was made to ensure fairness and equitable treatment for all its users and stakeholders.
Recently, Delaware Judge John Dorsey granted FTX’s bankruptcy advisors permission to seek votes from creditors. This process notably includes creditors not currently involved in the proposed repayment plan. Regarding the proposed repayment plan, FTX aims to offer its customers 119% of the value of their assets as of the date the company filed for Chapter 11 bankruptcy protection.
