DCG and its CEO Barry Silbert have sought to dismiss a lawsuit from New York's Attorney General, Letitia James. The legal action alleges DCG and its subsidiary Genesis Global Capital defrauded investors connected to Gemini's Earn product and Genesis following the collapse of crypto entities Three Arrows Capital and FTX. The move follows DCG's opposition to a proposed settlement deal from Genesis with the NYAG last month.

FTX co-founder Sam Bankman-Fried has been sentenced to 25 years in prison on seven fraud and conspiracy charges related to the collapse of the FTX exchange. He was also fined $11 billion, around the same amount that was lost by the exchange and the Alameda trading firm. The judge recommended he serve his sentence in a medium or low-security federal prison near the Bay Area to facilitate family visitation.

Former crypto exchange FTX has proposed a plan to see 98% of creditors receive 118% of their claims. Other non-governmental creditors would get 100% of claims plus up to 9% interest if the bankruptcy court approves the plan. The money was accrued by selling various FTX assets, like its stake in AI company Anthropic. FTX's lack of BTC and ETH holdings at the time of bankruptcy prevented it from seeing asset appreciation due to recently rising prices.

Despite mainstream media headlines suggesting FTX creditors will recover over 100% of their funds, the actual value users will receive is significantly less than what the assets could/would have been worth. Creditors will receive ~118% of their funds fixed to the fiat value of their assets on FTX's bankruptcy filing date. Many of the lost currencies (e.g., BTC, SOL, and ETH) have appreciated significantly since then.

The SEC has warned FTX that it may oppose the bankrupt exchange's plan to repay creditors using stablecoins or other digital assets. The agency also objects to provisions that would limit future legal liabilities for FTX's estate, aligning with the U.S. Trustee's concerns over discharge provisions that protect the debtors from further claims.

Six months into a 25-year sentence, FTX founder Sam Bankman-Fried is appealing his fraud conviction and requesting a new trial. He claims that the former judge was biased against him after he was convicted of seven counts of fraud because of the collapse of the FTX exchange. Bankman-Fried claims that the exchange was never insolvent, as evidenced by the over-100% customer fund recovery.

Caroline Ellison, former head of FTX's sister investment firm Alameda Research, has been sentenced to two years in prison for her role in one of the largest financial frauds in history. She pleaded guilty to seven fraud and money-laundering offices related to FTX's collapse but helped testify against her former boyfriend and boss, Sam Bankman-Fried, putting him in prison for 25 years.

Caroline Ellison, the former CEO of Alameda Research, has been sentenced to two years in a minimum-security prison for her involvement in the collapse of FTX.

FTX has announced a significant decision regarding the allocation of proceeds from government forfeiture actions, setting aside up to $230 million specifically for certain shareholders rather than creditors. This move has sparked controversy, particularly among creditors who traditionally expect to be reimbursed before shareholders in bankruptcy proceedings. The agreement was finalized after the deadline for creditors to vote on the reorganization plan, and its revelation came as a surprise, leading to frustration and feelings of betrayal among creditors. The FTX estate, which is managing the bankruptcy process, argues that this reimbursement strategy is intended to prevent costly litigation and delays associated with the forfeiture proceeds. The plan stipulates that 18% of all proceeds from government forfeiture actions will be allocated to a special fund for the exclusive benefit of preferred shareholders, with the total amount capped at $230 million. This decision was made official on August 28, but creditors were not informed until September 27, which was the last day allowed for filing amendments to the plan. Critics, including representatives from creditor groups, have expressed their discontent, claiming that ordinary creditors had no opportunity to voice their opinions on this provision. Many creditors feel that they have been scammed again, as they had voted overwhelmingly in favor of the plan without knowledge of this new agreement. The FTX estate's filing suggests that both the debtors and preferred shareholders have a mutual interest in avoiding the costs and delays that could arise from litigation over the forfeiture proceeds. The FTX estate has estimated the total value of the forfeiture proceeds to be around $1.19 billion, which includes various assets such as cash, digital assets, and even private planes. The allocation of 18% of these proceeds aligns closely with the $230 million set aside for shareholders. Additionally, the plan allows for each shareholder to receive up to $250,000 for legal fees from the segregated fund. Despite the bankruptcy plan receiving preliminary support from creditors, there are concerns about the actual recovery amounts. Creditors are expected to receive at least 118% of their claim value in cash, but some representatives argue that the real recovery will be significantly lower when considering the value of cryptocurrencies at the time of bankruptcy compared to their current market value. The confirmation hearing for the FTX reorganization plan is scheduled for October 7, where a judge will decide on its approval. The estate is required to report the results of the creditor vote by September 30, which is also the deadline for filing any responses to objections regarding the plan. This situation highlights the complexities and tensions inherent in bankruptcy proceedings, particularly in the volatile cryptocurrency sector.

The FTX Token (FTT), associated with the now-bankrupt cryptocurrency exchange FTX, experienced a significant surge of over 70% on September 29, 2024, reaching a price of approximately $2.70, the highest it had been since March 2024. This spike in value came amid speculation on social media regarding potential bankruptcy distributions to creditors and customers, which were rumored to begin on September 30. However, the official bankruptcy plan had not yet been approved, with a court hearing set for October 7 to discuss the plan's approval. Following the initial surge, the price of FTT fell back to around $2.10 by September 30, still reflecting a 30% increase over the previous 24 hours. If the bankruptcy plan is approved, it is expected that the FTX trustee will start making distributions to creditors with claims under $50,000 by the end of 2024, while those with larger claims may have to wait until early 2025 for any reimbursements. FTT was launched in 2019 alongside the FTX platform and provided various benefits to users, such as trading fee discounts and the ability to use the token as collateral for futures positions. The token reached an all-time high of nearly $80 in September 2021 but saw a dramatic decline following the collapse of FTX in November 2022, dropping from around $25 to below $2. This decline was exacerbated by Binance's decision to sell its entire holdings of FTT as a risk management measure. As of late September 2024, there are approximately 30,600 holders of FTT, with a market capitalization of around $330 million. A previous recommendation in July 2024 suggested removing FTT claims from the bankruptcy proceedings due to its equity-like characteristics, indicating the complexities surrounding the token's status in the ongoing bankruptcy process.