Bankrupt crypto exchange FTX has reached a deal with the Sam Bankman-Fried-founded Emergent Technologies over more than $600 million worth of Robinhood shares.
FTX will pay Emergent $14 million to cover administrative expenses related to it 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.
FTX said the agreement helps recover more money for its creditors and avoid further litigation costs, adding it’s a crucial step in its reorganization plan to maximize value for creditors.
In a Sept. 6 declaration supporting the deal, Ray said it was the result of “good faith arm’s length negotiations between the parties and that such negotiations were free of any collusion.”
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.
Related: FTX victims go after company’s assets from criminal forfeiture
Emergent Fidelity Technologies is an offshore investment firm co-founded by Bankman-Fried and former FTX co-founder Gary Wang which filed for Chapter 11 bankruptcy in February 2023.
In late March Bankman-Fried was sentenced to 25 years in prison for his role in a massive fraud that led to the collapse of several high-profile crypto companies, including his own.
A hearing on the motion is scheduled for Oct. 22.
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