CFTC Secures Historic $12.7 Billion Judgment Against FTX & Alameda for Massive Fraud

In a major victory for defrauded FTX customers, the Commodity Futures Trading Commission (CFTC) has obtained a historic $12.7 billion judgment against the failed cryptocurrency exchange and its affiliated trading firm Alameda Research.

The U.S. District Court for the Southern District of New York approved a consent order requiring FTX and Alameda to pay $8.7 billion in restitution and $4 billion in disgorgement of ill-gotten gains. This record-breaking enforcement action represents the largest monetary relief ever obtained by the CFTC and will be used to further compensate victims of the massive FTX fraud scheme.

The consent order finds that FTX, under the control of now-jailed founder Sam Bankman-Fried, made material misrepresentations and omissions to customers. This includes falsely claiming that customer assets were segregated and held in "custody" when in fact they were commingled and misappropriated.

In addition to the monetary relief, the order imposes trading and registration prohibitions on FTX and Alameda going forward, and requires the companies to cooperate with the CFTC's ongoing litigation against Bankman-Fried and other former FTX executives.

The CFTC's enforcement action is part of a broader set of legal proceedings stemming from the implosion of FTX in late 2022. In a related settlement, the CFTC agreed not to seek a civil monetary penalty against FTX and to subordinate its claims to those of defrauded customers in the ongoing bankruptcy proceedings.

This landmark case underscores the CFTC's commitment to aggressively pursuing misconduct in the crypto space and securing relief for harmed investors. The $12.7 billion judgment against FTX and Alameda represents a significant step towards justice for the thousands of customers impacted by one of the largest crypto scandals in recent history.

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