FTX Aims to Recover $21 Million in Assets through Settlements with Bank and Charity

FTX, the bankrupt cryptocurrency exchange, has secured settlement agreements with Evolve Bank and the Silicon Valley Community Foundation (SVCF) that could enable it to reclaim up to $21 million in assets. These agreements, filed on Oct. 30, are a significant step in FTX’s ongoing efforts to maximize creditor recovery through asset recovery, pending court approval at a scheduled hearing on Nov. 20.

Evolve Bank Settlement
Before FTX's collapse in 2022, Evolve Bank held three accounts for FTX affiliate West Realm Shires Services Inc., managing over $13 million in deposits under a Master Bank Services Agreement (MBSA). Evolve initially filed a non-customer Proof of Claim for the full account balance, citing indemnity and anticipated legal costs under the MBSA. However, the bank did not initially specify these costs.

Following extensive negotiations, FTX and Evolve Bank agreed on terms where Evolve will return approximately $12.77 million to FTX while retaining $462,698.65 for indemnification expenses. Evolve will also waive all current and future claims against FTX related to the MBSA. This settlement has been filed with the U.S. Bankruptcy Court in Delaware to expedite FTX’s asset recovery process and avoid prolonged litigation.

Silicon Valley Community Foundation Settlement
FTX also negotiated a settlement with SVCF to recover a significant sum without litigation. In December 2021, former FTX executives Nishad Singh and Caroline Ellison donated 434,500 FTT tokens to SVCF. Between January and November 2022, SVCF sold a portion of these tokens, generating $13,625,161, of which $5 million was directed toward external grants. This left SVCF with a balance of at least $8,574,674.07 and 34,208.70 FTT tokens.

FTX’s bankruptcy team argued that it had valid grounds to recover these assets transferred by Singh and Ellison. In response, SVCF agreed to return the remaining $8.57 million and FTT tokens to FTX, less administrative fees and costs, thereby avoiding the need for legal proceedings.

These settlements mark critical progress in FTX’s efforts to reclaim assets and provide relief to creditors.