The Commodity Futures Trading Commission (CFTC) announced today that the U.S. District Court for the Southern District of New York has entered a consent order against FTX Trading Ltd. and Alameda Research LLC (collectively, FTX), requiring them to pay $12.7 billion in monetary relief to customers and victims of the company’s fraudulent scheme.
The order mandates $8.7 billion in restitution and $4 billion in disgorgement, funds intended to further compensate those impacted by the massive fraud orchestrated by Samuel Bankman-Fried, the now-bankrupt FTX group, and key insiders. This action builds upon previous CFTC complaints filed in 2022 and 2023.
According to the court findings, FTX violated the Commodity Exchange Act (CEA) and CFTC regulations. The order imposes permanent injunctions against future violations, prohibits further trading and registration, and compels FTX and Alameda to fully cooperate with the CFTC’s ongoing litigation.
The court determined that FTX misrepresented crucial information to customers, falsely advertising itself as “the safest and easiest way to buy and sell crypto.” While claiming to hold customer assets—including Bitcoin and Ether—in “custody” and to segregate those funds from its own, FTX commingled and misappropriated customer money.
In a related agreement with the Bankruptcy Court for the District of Delaware, the CFTC agreed to forgo a civil monetary penalty against FTX and subordinate its claims to those of the fraud victims. Payments made by FTX towards the CFTC’s disgorgement obligation will be directed to a supplemental remission fund to further compensate victims, pending bankruptcy court approval of the reorganization plan.
CFTC Chairman Rostin Behnam emphasized the deceptive nature of FTX’s practices, stating the company employed “age-old tactics to create an illusion” of security. He highlighted the lack of basic regulatory tools—governance, customer protections, and surveillance—that could have prevented the collapse. Behnam also noted this resolution aligns with previous enforcement actions against major crypto players like Binance, BitMEX, and Tether, but stressed this represents only a fraction of the broader issues within the industry.
Ian McGinley, Director of the CFTC’s Division of Enforcement, hailed the $12.7 billion recovery as the largest in CFTC history, achieved in a remarkably swift 21 months following FTX’s collapse. He praised the CFTC’s Chicago-based team for their dedicated efforts on behalf of the victims.
The consent order stems from a complaint initially filed by the CFTC in December of 2022.
Source: CFTC.gov
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