TLDR:
- After discussions, FTX and Emergent Technologies have settled their disagreement over the $600 million worth of Robinhood shares.
- In terms of the settlement, FTX will hand over $14 million to Emergent in exchange for Emergent dropping their claims on those shares.
- The shares were repossessed by Robinhood for a total of $606 million on the first of September, 2023.
- This agreement is a strategic move for FTX to enhance its financial stability and steer clear of further legal costs.
- A court session is arranged for October 22 to discuss the motion.
FTX, a cryptocurrency exchange that has gone bankrupt, has brokered a settlement with Emergent Technologies over claims on Robinhood shares worth $600 million.
The deal, outlined in a motion The motion, initiated by FTX's CEO John Ray III in a Delaware court, aims to solve one of many intricate problems linked to the downfall of Sam Bankman-Fried’s crypto venture.
According to the agreement, FTX will compensate Emergent with $14 million to cover costs associated with retreating their claim on the 55 million Robinhood shares and additional funds.
In return for this payment, Emergent will relinquish any claims to these shares and related cash, aiding FTX in optimizing value for creditors and simplifying its ongoing bankruptcy case.
The conflict over these Robinhood shares has been a major point of contention since FTX’s financial collapse in late 2022.
Emergent initially obtained around 56 million Robinhood shares, worth over $600 million, in May 2022 through dealings with Bankman-Fried and his trading outfit, Alameda Research.
After FTX declared bankruptcy, several parties, including FTX, BlockFi, Bankman-Fried, and Emergent, filed for ownership of these shares.
In January 2023, as part of an investigation into FTX’s downfall, the U.S. Department of Justice seized the disputed shares, which were later bought back by Robinhood for about $606 million on September 1, 2023.
Emergent Fidelity Technologies, an investment company founded by Bankman-Fried and ex-FTX partner Gary Wang, filed for bankruptcy under Chapter 11 in February 2023.
With this settlement, Emergent finds a quicker route to resolve its own bankruptcy case in Antigua.
In support of the agreement, FTX CEO John Ray III highlighted the fair and honest negotiation process, stating it took place without any collusion.
Such affirmations stress the focus on clarity and fairness throughout the resolution of FTX’s asset-related claims.
Beyond financial terms, the deal includes significant clauses such as Emergent, its Joint Liquidators, and Fulcrum agreeing not to oppose any FTX reorganization that aligns with the agreed terms.
Their cooperation is pivotal as FTX strategizes on a plan to repay creditors and potentially rejuvenate its business.
The agreement defines the necessary court endorsements from both Delaware and Antigua for its execution and progression of respective bankruptcy proceedings.
As part of the deal, FTX will dismiss the BlockFi lawsuit against Emergent soon after the agreement is activated, streamlining the legal processes for all parties.
The October 22 hearing will be crucial; approval of this settlement would be a key advancement in FTX’s bankruptcy saga, clearing significant disputes and smoothing the path for restructuring.
Blockonomi’s Editor-in-Chief, who also founded UK’s Kooc Media, is an advocate for open-source tech and a free and equitable internet.
