FTX Debtors Inks Agreement With K5 Global To Maximize Recoveries
Highlights
- FTX Debtors and K5 Global have inked a settlement deal
- The settlement made no mention of money, but K5 Global will help in asset recoveries
- FTX reached another significant settlement with LayerZero earlier
Defunct digital currency exchange under the FTX debtors identity has announced it has settled with K5 Global, a venture capital firm and incubation studio. This settlement aligns with a lawsuit it filed against the venture outfit in June 2024, seeking $700 million in disputed investments.
FTX Debtors and the K5 Global Settlement
According to the announcement, both parties have agreed to work together to maximize recoveries for FTX stakeholders. The settlement update did not define whether FTX Debtors made any financial recoveries from K5 Global.
However, FTX Exchange’s CEO, John Ray III, said the settlement is mutually beneficial, describing K5 as a bright spot in the crypto trading platform’s portfolio. K5 Global will actively use its resources to help the embattled firm recover more funds.
The lawsuit filed by the FTX Debtors accused K5’s co-founder, Michael Kives, of using his political network to create a path for Sam Bankman-Fried (SBF) to siphon customer funds. As a former aid to Clinton’s Chief of Staff, Huma Abedin, Kives had the network that SBF coveted.
The lawsuit at the time was filed as part of the extensive push to recover assets for the FTX creditors.
Other High-Profile FTX Debtors Legal Cases
As it is at the tail end of its bankruptcy proceedings, the embattled firm is resolving some of its high-profile cases with former industry partners. As reported earlier by CoinGape, LayerZero has confirmed a settlement with FTX over a deal it made with Alameda Research just before the estate’s collapse in 2022.
The FTX Debtors sued LayerZero in 2023, seeking to claw back $86 million in a share-sell agreement with Alameda. Following the settlement, the protocol said it had written its $11.5 share deal to $0, hoping it could recoup some back with the bankruptcy proceedings.
In November last year, the exchange filed to recoup $67 million from Anthony Scaramucci as part of its funds recuperation proceedings. Other settlement deals it has inked include those featuring the forfeited $70 million from Sam Trabucco, a former Alameda Research executive.
The Creditor Repayments
After a lengthy process, the trading platform kicked off claims distribution and reorganization plans. While the plan was designed to last many weeks, the exchange had earmarked $6.5 billion for claims repayment.
Beyond the creditor repayments, FTX Exchange has inked several other deals to help ease its financial burden. One of these deals is the sale of FTX EU to Backpack, a deal that will involve the latter repaying all creditor claims in the region.
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