FTX Reaches $16 Million Settlement to Recover Embedded Customer Funds

Manoj Prasad

The company that runs the cryptocurrency exchange FTX has asked Delaware’s bankruptcy court to approve a $16 million settlement that will end an adversary action and allow the recovery of millions of dollars in customer and company funds that were given as gifts to charities connected to founder Sam Bankman-Fried.

The lawsuit was filed on May 17, 2023, in the US Bankruptcy Court for the District Court of Delaware under Adversary Proceeding No. 23-50381. The deal is part of that case.

The settlement deal will end the arguments between the FTX Debtors and Samuel Bankman-Fried, Nishad Singh, and Gary Wang that were only about buying Embed Financial Technologies.

The FTX Debtors have Sullivan & Cromwell LLP as their lawyer, LLC as their financial manager, Perella Weinberg Partners LP as their investment banker, Quinn Emanuel Urquhart & Sullivan, LLP as their special counsel, and Landis Rath & Cobb LLP as their Delaware counsel.

The FTX Debtors’ CEO and Chief Restructuring Officer, John J. Ray III, said that the deal is good for the FTX Debtors’ estate, creditors, and other important people.

The deal makes it possible for the FTX Debtors to take more steps to settle things at Embed and pursue other claims at the same time, without any problems.

This important agreement makes it possible for customers to get their money back and solves many of the difficult legal and other problems that the case brought up. The deal needs to be approved by the Supreme Court of The Bahamas. If it does, it will set out a plan to speed up the process of returning customers’ money.

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