A new chapter in the FTX saga has been written.
Bankrupt crypto exchange FTX has agreed with Emergent Technologies, a company founded by Sam Bankman-Fried, over handling more than $600 million worth of Robinhood shares.
As part of the settlement, FTX will pay Emergent $14 million to cover administrative costs related to withdrawing its claim on 55 million Robinhood shares and cash, according to a motion filed on September 6 by FTX CEO John Ray III in Delaware Bankruptcy Court.
In the latest crypto news, the settlement paves the way for Emergent to quickly wrap up its bankruptcy case in Antigua. For FTX, this deal is seen as a crucial part of its reorganization strategy, aiming to maximize creditor returns while avoiding further litigation costs.
Emergent acquired approximately 56 million Robinhood shares, valued at around $600 million, in May 2022 through a deal with Bankman-Fried and Alameda Research, his crypto trading firm.
However, after FTX’s collapse in November 2022, several parties—including FTX, BlockFi, Bankman-Fried, and Emergent—laid claim to the shares.
The U.S. Justice Department seized the shares in January 2023, and they were eventually sold back to Robinhood on Sept. 1, 2023, for around $606 million.
In a September 6 declaration supporting the settlement, Ray emphasized that the deal was reached through “good faith, arm’s length negotiations” without any collusion between the parties.
Emergent Fidelity Technologies, an offshore investment firm co-founded by Bankman-Fried and former FTX co-founder Gary Wang, filed for Chapter 11 bankruptcy in February 2023. Bankman-Fried, meanwhile, was sentenced to 25 years in prison in March for his role in the fraudulent collapse of several major crypto firms, including FTX.
A hearing on the motion is set for Oct. 22.
