Bankrupt cryptocurrency exchange FTX has filed a motion to pay $14 million to Emergent Fidelity Technologies, an Antigua-based investment firm co-founded by Sam Bankman-Fried, to settle claims related to over $600 million worth of Robinhood shares.
The motion was submitted by FTX CEO John Ray III and seeks to cover Emergent’s administrative expenses to avoid the costs and delays of litigation over the firm’s claims on 55 million seized Robinhood shares and cash. The settlement would also resolve Emergent’s Chapter 11 bankruptcy case in Antigua.
“Emergent and the Joint Liquidators have agreed to assign to the FTX Debtors all of their rights concerning the Robinhood Proceeds and Seized Cash held by the U.S. Department of Justice,” Ray said in his filing, noting that the parties will cooperate to facilitate the release of the assets to FTX.
FTX described the settlement as a crucial part of its reorganization plan to maximize repayment value for its creditors. A court hearing on the motion is scheduled for October 22.
Emergent acquired the Robinhood shares in May 2022. After FTX and its sister trading firm Alameda Research collapsed in November 2022, multiple parties, including FTX, Bankman-Fried, and BlockFi, claimed rights to the shares.
The U.S. Department of Justice seized the assets and liquidated them in September, with Robinhood repurchasing the shares for about $606 million.
Last month, a U.S. judge approved a $12.7 billion settlement between FTX, Alameda, and the Commodity Futures Trading Commission (CFTC), which stipulated that the CFTC would receive no funds if FTX adhered to its reorganization plan.
Bankman-Fried was convicted in November 2023 on multiple charges, including wire fraud and conspiracy, and sentenced to nearly 25 years in prison. He also faces fraud charges from the U.S. Securities and Exchange Commission (SEC).
