FTX Bankruptcy Restructuring Team and its creditors announced on the weekend that they have reached a settlement agreement with SBF, two former executives, and Embed regarding the claim of the acquisition case. 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 former engineering manager Nishad Singh, which will resolve some of the claims related to the acquisition of the stock trading platform Embed.
According to reports from Reuters and Cointelegraph, based on a document submitted by FTX to the US bankruptcy court in Delaware last Saturday, as part of the settlement agreement, FTX’s creditors are expected to recover 100% of the value that FTX paid to Embed at the time of the acquisition, as well as all the assets held by SBF, Singh, and Wang in Embed.
FTX is expected to recover $240 million in funds
FTX’s appointed lawyer for the creditors stated that FTX acquired Embed for $220 million in June 2022 through its US subsidiary, FTX US, but there was “almost no due diligence” during the process.
To further recover the assets, FTX’s bankruptcy restructuring team filed three lawsuits in May this year against SBF, Embed 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 document also pointed out that FTX US issued two Simple Agreements for Future Equity (SAFE), a commonly used fundraising contract for startups, to SBF in 2022, requiring the former CEO of FTX to pay $160 million to purchase the rights to a large number of shares in FTX US, and the latest proposed settlement agreement also suggests that SBF return all the value he may be entitled to in FTX US.
FTX to integrate bilateral assets with its Bahamian subsidiary
FTX’s restructuring team emphasized that the proposed settlement agreement only applies to 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 this year, FTX officially filed a lawsuit against SBF and several former executives, demanding the return of over $1 billion in company assets allegedly misappropriated before FTX’s bankruptcy.
Furthermore, on the 19th of last week, FTX’s 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 consolidate assets from both sides to distribute compensation to customers more fairly.