Bankrupt crypto exchange FTX has filed a motion to pay $14 million to fund Emergent Fidelity Technologies, an Antigua-based investment firm co-founded by Sam Bankman-Fried, for its claims of Robinhood shares worth over $600 million.
According to a motion by CEO John Ray III filed last Friday, FTX plans to use the $14 million to pay for Emergentâs administrative expenses to avoid the cost and delay of litigation related to the investment firmâs claims in around 55 million seized Robinhood shares and cash worth over $600 million in total. The motion said the settlement would also solve Emergentâs Chapter 11 bankruptcy case in Antigua.
âPursuant to the settlement, Emergent and the Joint Liquidators have agreed to assign to the FTX Debtors all of their rights (if any) with respect to the Robinhood Proceeds and Seized Cash held by the U.S. Department of Justice and otherwise cooperate to facilitate the release to the FTX Debtors of the Robinhood Proceeds and Seized Cash,â Ray said in a declaration filed Friday.
FTX called the settlement agreement âanother valuable piece of the puzzleâ in implementing its reorganization plan to maximize creditors' repayment value. The court hearing on this motion is expected to be held on Oct. 22.
Emergent initially purchased the Robinhood shares in May 2022. After FTX and sister trading firm Alameda Research collapsed in November 2022, multiple parties, including FTX, Bankman-Fried and BlockFi, asserted claims to the shares.
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The U.S. Department of Justice seized the $600 million in shares and cash and liquidated the Robinhood shares in September. Robinhood then repurchased the shares for around $606 million.
Last month, a U.S. judge approved a $12.7 billion settlement between FTX, Alameda and the Commodity Futures Trading Commission. In it, the CFTC agreed it would receive nothing as long as FTX related to its reorganization plan.
Bankman-Fried was found guilty in November 2023 of seven criminal counts, including two counts each of wire fraud and conspiracy to commit wire fraud, and was sentenced to nearly 25 years in prison. The U.S. Securities and Exchange Commission has also charged Bankman-Fried with fraud.
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