Bankrupt cryptocurrency exchange FTX has reached a settlement agreement with Evolve Bank and Silicon Valley Community Foundation (SVCF) that could allow it to recover up to $21 million in assets.
These settlements still require court approval, and a hearing is scheduled for Nov. 20, according to an Oct. 30 court filing.
Evolve bank payment
Prior to FTX's bankruptcy in 2022, Evolve Bank maintained three accounts with West Realm Shires Services Inc., an affiliate of FTX, under the Master Bank Services Agreement (MBSA). These accounts held more than $13 million in deposits on behalf of FTX affiliates.
Initially, Evolve Bank filed a non-customer certificate of claim for the full balance due to MBSA-related damages and potential legal costs. However, banks did not initially quantify these costs.
After extensive negotiations, FTX and Evolve Bank agreed to terms under which the financial institution will promptly return approximately $12.77 million to the bankrupt company, while retaining $462,698.65 in compensation costs.
Additionally, Evolve Bank waives all present and potential claims against FTX, including claims for damages and expenses under the MBSA.
FTX filed this settlement in the United States Bankruptcy Court for the District of Delaware to expedite asset recovery and avoid protracted litigation.
Silicon Valley Community Foundation Settlement
Similarly, FTX negotiated a settlement with SVCF to recover at least $8,574,674.07 and 34,208.70 FTT without filing a lawsuit.
According to court filings, former FTX executives Nishad Singh and Caroline Ellison donated 434,500 FTT tokens to the foundation in December 2021.
From January to November 2022, SVCF sold some of these tokens for $13,625,161, of which $5 million was allocated to external grants. This leaves the organization with a balance of at least $8,574,674.07 and 34,208.70 FTT.
FTX's bankruptcy team maintains that it has good cause to recover the assets transferred by Mr. Singh and Mr. Ellison.
The Foundation therefore agreed to return $8.57 million and the remaining FTT tokens (minus management fees and expenses) to the failed exchange to avoid the need for litigation.
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