FTX Bankruptcy Restructuring Team and its creditors reached a settlement agreement with SBF and two former executives over the claim related to the acquisition of stock trading platform Embed over the weekend. FTX is seeking to recover over $240 million in funds paid for the acquisition of Embed.
Bankrupt cryptocurrency exchange FTX’s restructuring team and its creditors announced on the 23rd that they have reached a settlement agreement with SBF, co-founder of FTX, Gary Wang, and Nishad Singh, former engineering chief, to resolve 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 creditors are expected to recover 100% of the value paid by FTX to acquire Embed at the time, as well as all assets held by SBF, Singh, and Wang in Embed.
FTX hopes to recover $240 million in funds
FTX creditors’ 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’s bankruptcy restructuring team filed three lawsuits against SBF, Embed founder Michael Giles, and other executives and shareholders in May 2022, seeking to recover over $240 million in funds paid for the acquisition of Embed.
In addition, the documents also indicated that FTX US issued two Simple Agreement for Future Equity (Safe) agreements to SBF in 2022, requesting the former CEO of FTX to pay $160 million to purchase the right to acquire a large number of FTX US stocks. The latest proposed settlement agreement also proposes that SBF return all the value he may be entitled to from FTX US.
FTX to integrate bilateral assets with its Bahamian subsidiary
The FTX restructuring team emphasized that the proposed settlement agreement only applies to the claims related to the acquisition of Embed, and the creditors 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 more than $1 billion in company assets allegedly misappropriated before FTX’s bankruptcy.
Furthermore, on the 19th of last week, the FTX restructuring team and its creditors also submitted legal documents, announcing that they have reached a global settlement agreement with FTX’s Bahamian subsidiary FTX Digital Markets, which plans to pool assets from both sides to more fairly distribute funds to compensate customers.