Bankman-Fried scandal: FTX ordered to pay $12 billion to its customers in relief

FTX has been ordered to pay restitution by CFTC
Founder Sam Bankman-Fried was sentenced to prison in March
Bankman-Fried stole over $8 billion from customer

Updated: Aug 8, 2024 / 03:40 PM CDT

Sam Bankman-Fried leaves federal court on Feb. 16, 2023. The FTX founder was convicted of fraud and cryptocurrency crimes (AP Photo/Seth Wenig, File)

(NewsNation) — A U.S. court ordered bankrupt cryptocurrency exchange FTX to pay $12.7 billion to its customers in relief, the Commodity Futures Trading Commission announced on Thursday.

FTX founder Samuel Bankman-Fried was sentenced to 25 years in prison in March for stealing $8 billion from its customers.

The CFTC has ordered FTX to pay $8.7 billion in restitution and $4 billion in disgorgement, “which will be used to further compensate victims for losses suffered as a result of the massive fraudulent scheme orchestrated by Samuel Bankman-Fried,” according to the CFTC.

FTX previously committed to a bankruptcy liquidation that will repay customers who lost money when the crypto exchange collapsed in 2022. The company has said customers will receive 100% recovery on their claims against the company.

According to CFTC Chairman Rostin Behnam, regulatory tools like governance and customer protections were “simply not there” in this case.

“FTX used age-old tactics to create an illusion that it was a safe and secure place to access crypto markets,” Behman said in a statement from the CFTC.