FTX’s borrowers have filed a separate deal with Sam Bankman-Fried on the Embed acquisition.
Debtors of defunct cryptocurrency exchange FTX have filed a separate lawsuit against the acquisition of stock clearing platform Embed in a bankruptcy case.
In a December 22 filing with the United States Bankruptcy Court for the District of Delaware, FTX's creditors said they had reached a settlement with former CEO Sam “SBF” Bankman-Fried “proceeding only with respect to the claims against him in Embed.” Attorneys representing FTX's management said the crypto Exchange acquired Embe through its US arm in June 2022 for $220 million.
“The plaintiffs' entry into the settlement is in the best interest of their assets, creditors and stakeholders, and the settlement should be completed expeditiously,” he said. “The terms of the agreement will recover 100% of the value of the plaintiffs' property. [simple agreements for future equity] on Bankman-Fried. Bankman-Fried also waived and assigned to Plaintiffs his right to access to the assets held in accounts in his name in Embed.
According to a December 22 filing, FTX US issued two simple agreements for SBF's future equity in 2022, requiring the former FTX CEO to pay $160 million for the right to acquire several shares in the crypto hedge fund. The resolution proposed that the entire value of FTX US entitled to SBF be returned.
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The proposed settlement resolves only specific bankruptcy matters related to creditor claims regarding Embed and SBF, rather than all assets held by the exchange. FTX filed for bankruptcy in November 2022 and was indicted on seven criminal charges in the United States following the resignation of Banman-Fried.
On December 19, FTX's borrowers said they planned to consolidate assets with FTX Digital Markets – the firm's Bahamian arm – in an effort to distribute funds to clients. The announcement is the latest effort by the debtors to liquidate the company's assets and pay creditors in accordance with the proposed corporate plans.
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