The bankrupt cryptocurrency exchange continues to resolve its debts
FTX, the bankrupt cryptocurrency exchange, has reached an agreement with Emergent Fidelity Technologies in a dispute over ownership of more than $600 million worth of Robinhood shares. Emergent, co-founded by FTX’s Sam Bankman-Fried, had been entangled in a legal battle over 55 million shares of Robinhood, seized by the US Justice Department following FTX’s collapse in 2022.
Under the terms of the settlement, FTX has agreed to pay Emergent $14 million to cover administrative costs, while Emergent will withdraw its claim to the Robinhood shares and cash. The settlement, filed in Delaware Bankruptcy Court on September 6 by FTX CEO John Ray III, also aims to help resolve Emergent’s bankruptcy case in Antigua more efficiently.
FTX views the agreement as a significant step in its reorganization plan, which is centered on maximizing value for creditors. By settling the dispute, the company hopes to avoid additional legal fees and expedite the recovery of funds for its creditors. John Ray III emphasized that the negotiations were conducted fairly and without any collusion, describing them as “good faith arm’s length negotiations.”
The Robinhood shares in question were initially acquired by Emergent through an arrangement with Bankman-Fried and Alameda Research, the crypto trading firm he founded. Since the downfall of FTX in November 2022, several parties, including FTX, BlockFi, and Bankman-Fried himself, have sought control over the shares.
The Justice Department seized the shares in January 2023, and they were later sold back to Robinhood in September 2023 for around $606 million. A hearing on the settlement motion is scheduled for October 22.
