A United States court has ordered bankrupt cryptocurrency exchange FTX to pay $12.7bn in relief to its customers, the Commodity Futures Trading Commission has said.
FTX drew customers in with “an illusion that it was a safe and secure place to access crypto markets,” then misappropriated their customer deposits to make its own risky investments, CFTC Chairman Rostin Behnam said in a statement on Thursday.
The repayment order implements a settlement between the CFTC and the bankrupt crypto exchange, which has committed to a bankruptcy liquidation that will repay customers whose deposits were locked during its late 2022 collapse.
FTX has said that its customers will receive 100 percent recovery on their claims against the company, based on the value of their accounts at the time it filed for bankruptcy.
The CFTC agreement resolves a potential roadblock to that repayment, ensuring that the government’s lawsuit against FTX will not reduce the funds available to its customers. The CFTC agreed not to collect any payment from FTX until all its customers are repaid, with interest.
The CFTC settlement requires FTX to pay $8.7bn in restitution and $4bn in disgorgement, which will be used to further compensate victims for losses suffered during the exchange’s collapse.
FTX did not immediately respond to a request for comment.
Its founder Sam Bankman-Fried was sentenced in March to 25 years in prison for stealing $8bn from customers. He has appealed the conviction.
FTX has used its bankruptcy to reach settlements with US regulators and former business partners and to sell assets that had been purchased with misappropriated customer funds, including real estate and investments in crypto and other tech companies.
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