FTX Creditors and Liquidators Nearing a Settlement, Terra CEO's Extradition Halted, Binance Settles $2.7B Case with CFTC
Summary:
A proposed settlement between FTX creditors and the failed crypto exchange's liquidators is underway, pending approval from the U.S. Bankruptcy Court for Delaware District and the Bahamas Supreme Court. In other news, a Montenegrin appellate court has nullified the authorization for former Terra CEO Do Kwon's extradition, and a U.S. court has approved a $2.7 billion payment from Binance to the Commodity Futures Trading Commission, to settle alleged violations of federal regulations.
A proposed settlement between FTX creditors and liquidators regarding the distribution of assets to clients of the collapsed crypto trading platform is in progress. Concurrently, an extradition permission granted previously by Montenegro's high court for the former Terra CEO has been annulled by the nation's appeals court, and an agreement between Binance and the Commodities Future and Trading Commission (CFTC) has been sanctioned by a U.S. federal court.
Creditors of the defunct FTX have reached a proposed settlement with the firm's liquidators, which is pending approval from the U.S. Bankruptcy Court for Delaware District and the Bahamas Supreme Court. The settlement plan proposes that all FTX clients without outstanding claims in court be reimbursed in US dollars for either cash or digital asset losses. Nonfungible tokens aren't covered under this settlement. Those eligible for claims can cast their votes on the compensation strategy in the next year's second quarter.
“This Global Settlement Agreement is another crucial step forward for FTX creditors,” said John J. Ray III, CEO of FTX. "The mesh of conflicting filings from FTX creditors and FTX Digital Markets was among the hardest obstacles we encountered. However, we acknowledged early on that we serve a shared constituency: the customers of FTX.com.”
FTX's collapse was one of the most notable instances in the history of cryptocurrency. The company's former CEO, Sam Bankman-Fried, was convicted on seven felony charges, with his sentencing due in March.
A verdict from a Montenegrin court has invalidated the extradition authorization for Terra's founder, Do Kwon, to the United States or South Korea. On December 14, the Appellate Court of Montenegro annulled the High Court of Podgorica's decision permitting Kwon's extradition, as announced officially on December 19. Previously, in November 2023, the legal prerequisites for Kwon's extradition were set by the High Court of Podgorica, leaving the final decision to the Minister of Justice of Montenegro. But following the latest decision by the appellate court, Kwon's defense successfully appealed this decision, and the case is now headed back to the Podgorica Basic Court for a re-trial.
Furthermore, Binance's previous CEO, Changpeng “CZ” Zhao, and the crypto company have been handed a ruling by a U.S. court ordering Binance to pay $2.7 billion and CZ to pay $150 million to the Commodity Futures Trading Commission (CFTC). On December 18, the CFTC announced that the enforcement action initiated by them, first issued in November, was finally approved and concluded by the U.S. District Court for the Northern District of Illinois.
“The court finds Zhao and Binance guilty of violating the Commodity Exchange Act (CEA) and CFTC regulations, and therefore imposes a $150 million fine specifically on Zhao, and requires Binance to forfeit $1.35 billion from illegitimate transaction fee earnings and pay a fine of $1.35 billion to the CFTC,” stated the CFTC. This settlement approval marks the end of a protracted lawsuit by the CFTC against Binance and CZ, who were charged in March for sidestepping federal regulation and running an unlicensed derivatives market.
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Published At
12/19/2023 9:15:58 PM
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