CFTC Secures $12.7 Billion Judgment Against FTX and Alameda Over Massive Crypto Fraud

The Commodity Futures Trading Commission (CFTC) announced that the U.S. District Court for the Southern District of New York has entered a consent order of permanent injunction and equitable relief against FTX Trading Ltd. and Alameda Research LLC. The court ordered FTX to pay $12.7 billion in monetary relief to compensate customers and victims harmed by the company's fraudulent operations. The judgment requires FTX to pay $8.7 billion in restitution alongside $4 billion in disgorgement. These funds are designated to compensate victims who suffered massive financial losses in the scheme orchestrated by Samuel Bankman-Fried, the bankrupt FTX corporate group, and a core group of company insiders. According to the court findings, FTX and Alameda repeatedly made material misrepresentations and omissions to their users. FTX marketed itself as the safest and easiest way to trade cryptocurrencies such as Bitcoin and Ether, falsely claiming that user assets were held in segregated custody. In reality, customer funds were commingled and misappropriated. The consent order imposes trading and registration prohibitions on FTX and Alameda, enjoins them from further violations of the Commodity Exchange Act (CEA) and CFTC regulations, and mandates cooperation with ongoing litigation. Through a related settlement in the U.S. Bankruptcy Court for the District of Delaware, the CFTC agreed to subordinate its claims to ensure payments towards disgorgement go directly toward victim compensation through a supplemental remission fund. While the consent order resolves the CFTC's corporate litigation against FTX and Alameda, enforcement proceedings against individual defendants, including Samuel Bankman-Fried, remain active as the agency pursues full restitution, penalties, and permanent bans.