A US court has ordered the bankrupt cryptocurrency exchange FTX to shell out $12.7bn (£9.9bn) to compensate customers and fraud victims, five months after its founder was jailed for his role in the collapse of the company.
The Commodity Futures Trading Commission (CFTC) said it was the “largest such recovery” in the regulator’s history and would help return funds to those affected by the “massive fraudulent scheme orchestrated by Sam Bankman-Fried, his now-bankrupt FTX group of companies, and a core group of FTX insiders”.
FTX imploded in late 2022 amid a crypto price crash. Its founder, Bankman-Fried, was jailed in March for 25 years after he was convicted of fraud and conspiracy to launder money late last year. He has been ordered to forfeit $11bn in assets.
FTX, which was once worth $32bn, had used customer funds for risky investments, through a closely associated hedge fund, Alameda Research. Bankman-Fried in turn used customer money for his own exploits, including large political donations in his name, luxury cars, properties in the Bahamas and endorsements from A-list celebrities.
Damn I didn’t know clawbacks were a thing. That would really suck if you just happened to benefit because of timing and someone else slurped your profits away. Fair though.