FTX Debtors Propose Separate Deal With Sam Bankman-Fried Over Embed Acquisition – The individuals who owe money to the now-closed FTX cryptocurrency exchange have suggested pursuing distinct legal action within the bankruptcy proceedings related to obtaining the stock-clearing platform Embed. In June 2022, FTX US acquired Embed for $220 million, and as part of the deal, the crypto exchange issued two straightforward agreements for future equity to Sam Bankman-Fried.
In a Dec. 22 filing for United States Bankruptcy Court for the District of Delaware, the FTX debtors said they had reached a proposed settlement with former CEO Sam “SBF” Bankman-Fried “solely with respect to the claims asserted against him in the Embed Proceeding.” The crypto exchange acquired Embed for $220 million through its U.S. arm in June 2022 despite having “performed almost no due diligence,” according to lawyers representing FTX’s leadership.
“The Plaintiffs’ entry into the Agreement is in the best interests of their estates, creditors and stakeholders, and the Agreement should be swiftly consummated,” said the filing. “The Agreement’s terms will recover for the Plaintiffs’ estates 100% of the value conferred by the [simple agreements for future equity] upon Bankman-Fried. Bankman-Fried also relinquishes the right to, and assigns to Plaintiffs, all assets held in accounts in his name at Embed.”
As per the filing on December 22, FTX US provided Sam Bankman-Fried with two uncomplicated agreements for future equity in 2022. These agreements mandated the former FTX CEO to remit $160 million, granting him the privilege to a specific quantity of shares in the cryptocurrency hedge fund. The resolution suggested the full return of the value of FTX US to which Sam Bankman-Fried might be entitled.
The suggested agreement aims to address specific aspects of the bankruptcy case related to Embed and SBF, rather than encompassing all the assets entangled in the exchange’s dealings with creditor claims. FTX initiated bankruptcy proceedings in November 2022 after Bankman-Fried’s resignation, who has since faced seven felony charges in the United States.
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On December 19, FTX debtors announced their intention to consolidate assets with FTX Digital Markets, the company’s Bahamian branch, as part of the ongoing initiatives to allocate funds to customers. This announcement represents the latest endeavor by debtors to manage company assets and fulfill obligations to creditors within proposed organizational plans.