TL;DR
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FTX and its sister company, Alameda Research, have been ordered by a judge to pay $12.7 billion USD to creditors, marking the end of a lengthy lawsuit with the Commodity Futures Trading Commission (CFTC).
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In a significant development this week, FTX and its affiliate Alameda Research have been mandated by a court to settle a $12.7 billion debt to creditors, concluding a legal battle spanning over 20 months with the Commodity Futures Trading Commission (CFTC).
This ruling comes as a decisive blow to FTX and Alameda, prohibiting them from engaging in digital asset trading and acting as intermediaries within the market.
The question arises – how will a financially insolvent entity manage to repay such a colossal sum? The answer lies in the assets forfeited by Sam Bankrun-Fraud, the former head of the company, amounting to $11 billion. Additionally, the entities possess valuable cryptocurrency holdings in assets such as Solana, whose value has surged post the market downturn instigated by their actions.
Following the verdict, FTX and Alameda have initiated bankruptcy proceedings, with the restructuring process overseen by Kroll, tasked with determining the remaining assets, allocating funds to creditors based on priority, and managing the overall resolution process.
This development has significant implications for the cryptocurrency sector and serves as a cautionary tale for businesses operating within the digital asset space.