Exciting Proposal By FTX Debtors: Exclusive Deal With Sam Bankman-Fried for Embed Acquisition!

In June 2022, FTX US purchased Embed for $220 million, granting two simple agreements for future equity to Sam Bankman-Fried, the crypto exchange’s founder.

Creditors of the defunct FTX crypto exchange have proposed separate legal action in the bankruptcy case involving the acquisition of stock-clearing platform Embed.

In a filing on Dec. 22 in the United States Bankruptcy Court for the District of Delaware, FTX creditors mentioned a proposed resolution with former CEO Sam “SBF” Bankman-Fried regarding claims in the Embed matter. Despite minimal due diligence, the crypto exchange acquired Embed for $220 million via its U.S. division in June 2022, as per legal representatives of FTX’s management.

“The Plaintiffs’ entry into the Agreement is in the best interests of their estates, creditors and stakeholders, and the Agreement should be swiftly consummated,” said the filing. “The Agreement’s terms will recover for the Plaintiffs’ estates 100% of the value conferred by the [simple agreements for future equity] upon Bankman-Fried. Bankman-Fried also relinquishes the right to, and assigns to Plaintiffs, all assets held in accounts in his name at Embed.”

As per the filing on December 22, FTX US provided two simple agreements for future equity to SBF in 2022, entailing the former FTX CEO’s payment of $160 million for shares in the crypto hedge fund. The resolution suggests the potential return of all value from FTX US to SBF.

The proposed agreement aims to address specific aspects of the bankruptcy case linked to Embed and SBF, rather than all the assets in question amid creditor claims. FTX initiated bankruptcy proceedings in November 2022 following Bankman-Fried’s resignation, who was subsequently convicted of seven felony charges in the United States.

On December 19, FTX debtors outlined intentions to consolidate assets with FTX Digital Markets, the company’s Bahamian division, as part of strategies to allocate funds to customers. This move is the latest in a series by debtors to manage company assets and settle creditor obligations per proposed restructuring plans.

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