FTX reaches a $12.7 billion settlement with the CFTC! Will it affect creditor compensation?

This site (120bTC.coM): According to a court document filed in the U.S. Bankruptcy Court for the District of Delaware last week, FTX and the CFTC have been negotiating for the past few months. The document stated that the settlement agreement resolved the The debtor's ongoing litigation and dispute with one of its largest creditors, avoiding the costs and delays of further litigation and mitigating the significant risk of a significant reduction in assets available for distribution by creditors.

CFTC settles with FTX and pays US$12.7 billion in compensation without paying fines

The origin of the case is: CFTC filed a fraud lawsuit against FTX, former FTX CEO Sam Bankman-Fried and affiliated company Alameda in 2022, accusing the defendants of behavior Resulting in $8 billion in customer losses, the CFTC initially sought $52.2 billion in damages from FTX under the proposed settlement.

As part of the settlement, the CFTC agreed not to receive any compensation as long as FTX complies with its restructuring plan. Andy Dietderich, a partner at Sullivan & Cromwell and lead counsel for the FTX debtors, said in an emailed statement: In this customized settlement agreement, the CFTC waives its own recovery against FTX to recover recoveries from customers and cryptocurrency lenders beyond the 11th Typical scope in chapter bankruptcy cases.

It is understood that the original settlement agreement was divided into US$8.7 billion in compensation and US$4 billion in recovery payments. However, according to the settlement document, the US$4 billion recovery payment will be "ranked after the payment of all creditors' priority claims." In other words, all the US$12.7 billion can be used to compensate users first (the specific amount is calculated based on the official liquidation results)

Voting on the claim plan is due next month

The hearing on the settlement motion will be held on August 6, and FTX will be held at the end of 2022 After filing for bankruptcy, in May this year, the FTX bankruptcy reorganization team announced a reorganization plan, stating that creditors will receive full cash repayment. According to the reorganization plan, creditors with a claim amount of less than $50,000 will be eligible to file a reorganization plan within 60 days after court approval. , receiving 118% compensation.

However, some creditors are opposed to the plan, arguing that the assets should be paid in cryptocurrency rather than the dollar value at the time the exchange filed for bankruptcy.

The deadline for FTX customers and creditors to vote on its bankruptcy repayment plan is August 16. However, it should be noted that voting does not take effect based on the options voted by users. Instead, it expresses the opinions of the creditors committee based on the voting results, and ultimately The final result still needs to be determined by a judge.

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