FTX poised to recover £240 million! SBF’s acquisition of brokerage Embed settles dispute

FTX Bankruptcy Restructuring Team and its debtors have reached a settlement agreement with SBF, two former executives, and Embed regarding the acquisition claim. FTX is seeking to recover over $240 million in funds paid for the acquisition of Embed.
The bankrupt cryptocurrency exchange FTX Bankruptcy Restructuring Team and its debtors announced on the 23rd that they have reached a settlement agreement with SBF, Gary Wang, and former engineering director Nishad Singh, co-founders of FTX, regarding some claims related to the acquisition of stock trading platform Embed.
According to reports from Reuters and Cointelegraph, as part of the settlement agreement, FTX debtors are expected to recover 100% of the value paid by FTX to Embed at the time of the acquisition, as well as all assets held by SBF, Singh, and Wang in Embed.
FTX is expected to recover $240 million in funds
FTX debtors’ appointed lawyers stated that FTX acquired Embed for $220 million through its US subsidiary FTX US in June 2022, but “almost no due diligence was conducted” during the process.
To further recover assets, FTX Bankruptcy Restructuring Team filed three lawsuits in May 2022 against SBF, Embed co-founder Michael Giles, and other executives and shareholders, seeking to recover over $240 million in funds paid for the acquisition of Embed.
In addition, the documents also pointed out that FTX US issued two Simple Agreement for Future Equity (SAFE) agreements to SBF in 2022, demanding that the former CEO of FTX pay $160 million to purchase the rights to a large number of FTX US stocks. The latest proposed settlement agreement also proposes SBF to return all FTX US value he may have the right to obtain.
FTX will integrate bilateral assets with its Bahamian subsidiary
The FTX restructuring team emphasized that the proposed settlement agreement only applies to claims related to the acquisition of Embed, and debtors will continue to pursue other claims against former CEO SBF and senior executives. In July 2022, FTX officially sued SBF and several former executives, demanding that they return over $1 billion in allegedly misappropriated company assets before the bankruptcy of FTX.
Furthermore, on the 19th of last week, the FTX restructuring team and its debtors also submitted legal documents announcing that they have reached a global settlement agreement with FTX’s Bahamian subsidiary, FTX Digital Markets. The agreement plans to pool assets from both sides to distribute funds to customers more fairly.