Key takeaways:
- Regarding acquiring the stock-clearing platform Embed, the debtors of FTX have suggested pursuing separate litigation in the bankruptcy process.
- The terms of the agreement shall collect for the estates of the plaintiffs any value bestowed upon SBF for future equity through the simple agreements.
Regarding acquiring stock-clearing platform Embed, the debtors of the now-defunct cryptocurrency exchange FTX have suggested pursuing separate litigation in the bankruptcy process.
The FTX debtors announced on December 22 that they had negotiated a proposed settlement with former CEO Sam Bankman-Fried (SBF) exclusively regarding the claims made against him in the Embed Proceeding in a filing to the United States Bankruptcy Court for the District of Delaware.
Lawyers for FTX’s executives claim that the cryptocurrency exchange “performed almost no due diligence” when acquiring Embed for $220 million through its U.S. branch in June 2022. According to the filing:
“The Plaintiffs’ entry into the Agreement is in the best interests of their estates, creditors and stakeholders, and the Agreement should be swiftly consummated,”
The terms of the agreement shall collect for the estates of the plaintiffs any value bestowed upon SBF for future equity through the simple agreements. Additionally, SBF gives up all rights to and assigns to Plaintiffs all assets held in Embed accounts that are registered in his name.
The December 22 filing states that in 2022, FTX US granted SBF two basic agreements for future equity, which stipulated that the former CEO of FTX would have to pay $160 million to acquire several shares in the cryptocurrency hedge fund. The resolution suggested returning the total amount of FTX US value to SBF, to which it might be entitled.
After SBF resigned, FTX filed for bankruptcy in November 2022. Since then, Fried has been found guilty of seven felonies in the United States.
On December 19, FTX debtors announced their intention to combine assets with FTX Digital Markets, the company’s Bahamian division, in an attempt to disburse money to clients. The disclosure represented the debtors’ most recent attempt to manage business assets and pay back creditors in accordance with suggested organization plans.
