FTX eyes $21 million asset recovery through settlements with bank and charity organization News ▸ US ▸ Bankruptcy
FTX eyes $21 million asset recovery through settlements with bank and charity organization
These settlements represent crucial progress for FTX as it works to maximize creditor recovery through asset retrieval.
2 min read
Updated: Nov. 1, 2024 at 11:08 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Bankrupt crypto exchange FTX has reached settlement agreements with Evolve Bank and Silicon Valley Community Foundation (SVCF) that could enable it to recover up to $21 million in assets.
According to Oct. 30 court filings, these settlements still require court approval, with a hearing set for Nov. 20.
Evolve Bank settlement
Before FTX’s collapse in 2022, Evolve Bank maintained three accounts for West Realm Shires Services Inc., an FTX affiliate, under a Master Bank Services Agreement (MBSA). These accounts held more than $13 million in deposits on behalf of the FTX affiliate.
Initially, Evolve Bank filed a non-customer Proof of Claim for the full balance, citing indemnity and potential legal fees associated with the MBSA. However, the bank did not initially quantify these expenses.
After extensive negotiations, FTX and Evolve Bank agreed on a stipulation whereby the financial institution will promptly return approximately $12.77 million to the defunct firm while retaining $462,698.65 as indemnification expenses.
Additionally, Evolve Bank will waive all current and potential claims against FTX, including indemnity and expense claims under the MBSA.
FTX filed this settlement with the US Bankruptcy Court for the District of Delaware to expedite asset recovery and avoid prolonged litigation.
Silicon Valley Community Foundation settlement
Similarly, FTX has negotiated a settlement with SVCF to recover at least $8,574,674.07 and 34,208.70 FTT without entering litigation.
According to the court filing, former FTX executives Nishad Singh and Caroline Ellison donated 434,500 FTT tokens to the Foundation in December 2021.
Between January and November 2022, SVCF sold part of these tokens for $13,625,161, of which $5 million was allocated to external grants. This leaves the organization with a balance of at least $8,574,674.07 and 34,208.70 FTT.
FTX’s bankruptcy team contends that it has valid grounds to reclaim the assets transferred by Singh and Ellison.
So, the Foundation agreed with the failed exchange to return the $8.57 million and the remaining FTT tokens—less administrative fees and costs—to sidestep the need for litigation.
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Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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FTX is a cryptocurrency derivatives exchange that offers futures, leveraged tokens and OTC trading.
FTX
FTX is a defunct cryptocurrency exchange, currently in bankruptcy proceedings, that was founded by Sam Bankman-Fried and Zixiao “Gary” Wang in May 2019.
Alameda Research
Alameda Research was once a principal trading firm, operating as an arm of the failed crypto exchange, FTX.
Caroline Ellison is the former lead trader and former CEO at Alameda Research.
