The now bankrupt FTX and Alameda Research are required to pay $8.7 billion in restitution and $4 billion in disgorgement.
The order comes after FTX founder Sam Bankman Fried was sentenced to 25 years in prison in March and another FTX executive Ryan Salame was sentenced to seven and a half years in May.
CFTC also found the FTX violated Commodity Exchange Act (CEA) and CFTC regulations. The order bans FTX from trading, holding or receiving funds for buying or selling cryptocurrencies. FTX are also requires FTX and Alameda to cooperate with ongoing CFTC litigation.
Rostin Behnam, CFTC chairman, said: “FTX used age-old tactics to create an illusion that it was a safe and secure place to access crypto markets. But the basic regulatory tools, like governance, customer protections, and surveillance that exist to identify misconduct and ultimately prevent collapse, were simply not there.
“Like countless other CFTC crypto resolutions, including major players Binance, BitMEX, and Tether, this resolution with FTX is consistent with the enforcement commitments I have long made as Chairman. But, as I have been saying for years, this is just the tip of the iceberg. In the absence of digital asset legislation to fill regulatory gaps, entities will continue to operate in the shadows without these basic tools of sound regulation, sharpening their deceptive practices and continuing to dupe customers.”
Ian McGinley, division of enforcement director, CFTC, added, “Not only is this multi-billion dollar recovery for victims the largest such recovery in CFTC history, we achieved it with remarkable speed. FTX’s massive fraud collapsed 21 months ago and in that time the CFTC investigated, filed a complaint, and achieved what many thought was impossible at the time of the collapse – a resolution to compensate victims for the losses they suffered. I commend our Chicago-based team for their tireless efforts on behalf of FTX’s victims.”
