FTX, the collapsed digital asset exchange, has reached a settlement with the Commodity Futures Trading Commission (CFTC). This agreement, which awaits court approval, marks a pivotal moment in the ongoing FTX bankruptcy saga that has captivated the crypto industry since late 2022. The settlement involves a complex arrangement concerning a $4 billion CFTC claim and introduces a new mechanism for potential additional compensation to affected cryptocurrency holders.
FTX Settlement With CFTC & Impact on Creditors
FTX, the now-defunct cryptocurrency exchange, has reached a settlement with the Commodity Futures Trading Commission (CFTC) in a significant development for its ongoing bankruptcy case. The agreement, which still requires court approval, involves the subordination of a $4 billion CFTC claim to creditor claims and interest.
Under the terms of the settlement, the CFTC’s $4 billion claim will be allowed but ranked below all other creditor claims and interest payments. Any funds that would have gone to the CFTC will instead be directed to a Supplemental Remission Fund. This fund is designed to provide additional compensation to adversely affected cryptocurrency holders, but will only be activated after all creditors are paid with interest and if surplus funds are available.
The settlement follows a District Court order by Judge Kaplan, which imposed a $4 billion disgorgement and $8.7 billion restitution to creditors. As part of the agreement, FTX debtors will receive dollar-for-dollar credit against the disgorgement order.
A key aspect of the settlement is its recognition that creditors with cryptocurrency-related investments have been particularly harmed by the alleged illegal conduct. This acknowledgment is partly attributed to the impact of over 200 victim statements sent to Judge Kaplan by FTX victims.
However, the settlement has not been without controversy. Some creditors have argued that the FTX bankruptcy estate is effectively using victims’ assets to pay government fines. These fines, they contend, result from FTX’s misrepresentations to the CFTC and are being paid before fully compensating the victims at current market prices.
Also Read: Anti-Crypto SEC Commissioner Caroline Crenshaw’s Renomination to Be On Hold
Restructuring Plan and FTT Token Holders
On the other hand, recent development has shown that the FTX restructuring plan has encountered obstacles, particularly for holders of the FTT token. The official committee of unsecured creditors announced that FTX debtors are using Kroll, a third-party administrator, to distribute voting materials and comments to creditors and customers.
A significant aspect of this process is that users who filed claims solely based on FTT holdings are automatically considered to reject the restructuring plan and are not given voting rights. However, these claimants can still opt into the plan releases. Customers with claims involving fiat currency, other tokens, or cryptocurrencies beyond FTT should receive a ballot for voting on the plan.
Also Read: Coinbase Vs. SEC: Coinbase Pushes To Subpoena Gary Gensler Despite Recent Setback
The post FTX Reaches Settlement With CFTC, $4B Claim Subordinated appeared first on CoinGape.
Earn more PRC tokens by sharing this post. Copy and paste the URL below and share to friends, when they click and visit Parrot Coin website you earn: https://parrotcoin.net0
PRC Comment Policy
Your comments MUST BE constructive with vivid and clear suggestion relating to the post.
Your comments MUST NOT be less than 5 words.
Do NOT in any way copy/duplicate or transmit another members comment and paste to earn. Members who indulge themselves copying and duplicating comments, their earnings would be wiped out totally as a warning and Account deactivated if the user continue the act.
Parrot Coin does not pay for exclamatory comments Such as hahaha, nice one, wow, congrats, lmao, lol, etc are strictly forbidden and disallowed. Kindly adhere to this rule.
Constructive REPLY to comments is allowed