Bankrupt crypto exchange FTX has reached an agreement with Sam Bankman-Fried-founded Emergent Technologies to pay $14 million to settle issues over Robinhood shares worth over $600 million.
Details of the Agreement
FTX will pay Emergent $14 million for administrative expenses related to withdrawing a petition to claim 55 million Robinhood shares and cash, according to a Sept. 6 motion by FTX CEO John Ray III in a Delaware Bankruptcy Court. The settlement also provides a path for Emergent to quickly resolve its bankruptcy case in Antigua.
Background of the Situation
Emergent first acquired around 56 million Robinhood shares worth around $600 million in May 2022 through an agreement with Bankman-Fried and Alameda Research, the crypto trading firm he founded. Multiple parties, including FTX, BlockFi, Bankman-Fried, and Emergent, have asserted ownership or rights to the shares that were seized by the Justice Department in January 2023 following FTX’s collapse in November 2022. They were then liquidated on Sept. 1, 2023, to Robinhood, which repurchased the shares for roughly $606 million.
Comments from FTX CEO
On Sept. 6, John Ray III stated that the agreement helps recover more money for creditors and avoid further litigation costs, adding it’s a crucial step in FTX’s reorganization plan to maximize value for creditors. A hearing on the motion is scheduled for Oct. 22.
The settlement with Emergent represents an important step in recovering FTX assets and accelerating Emergent's bankruptcy process. A hearing on the matter is set for Oct. 22.
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