Ex-Alameda CEO Caroline Ellison to Surrender Majority of Assets to FTX Debtors in Bankruptcy Settlement

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2024-10-09 03:37:53

Caroline Ellison FTX FTX Bankruptcy

This includes assets not already seized by the government or allocated for her legal defense. Last updated:

October 9, 2024 07:37 EDT

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Ruholamin Haqshanas

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Ruholamin Haqshanas

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Ruholamin Haqshanas is a contributing crypto writer for CryptoNews. He is a crypto and finance journalist with over four years of experience. Ruholamin has been featured in several high-profile crypto…

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Last updated:

October 9, 2024 07:37 EDT

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The agreement, detailed in a court filing on Monday, aims to recover assets to benefit creditors impacted by the collapse of FTX, a major cryptocurrency exchange.

According to the filing by FTX Trading Ltd., Ellison will transfer “substantially all of her assets” to the FTX debtors.

This includes assets not already seized by the government or allocated for her legal defense.

Ellison to Cooperate in FTX Investigations

Additionally, Ellison has pledged to cooperate fully with the FTX bankruptcy estate in both ongoing and future investigations related to the case.

FTX’s downfall began in late 2022 when the company filed for bankruptcy, leading to a legal battle to recover assets from former utives, including Ellison and FTX founder Sam Bankman-Fried.

The current litigation seeks to reclaim approximately $22.5 million in bonuses Ellison received in February 2022, along with $6.3 million transferred to her in July and September 2021.

The settlement terms indicate that Ellison will be left with only physical personal property after the asset transfer.

🇺🇸 Caroline Ellison has agreed to forfeit nearly all her assets to FTX creditors as part of a settlement, with a hearing scheduled for Nov. 20. 👀 pic.twitter.com/h3GI0Ft06X

— Crypto Crib (@Crypto_Crib_) October 9, 2024

The FTX bankruptcy case has drawn significant attention due to its scope and complexity.

On Monday, Judge John Dorsey of the U.S. Bankruptcy Court for the District of Delaware approved FTX’s reorganization plan.

The plan has garnered support from about 94% of creditors within the “dotcom customer entitlement claims” class, representing roughly $6.83 billion in claims by value.

Ellison’s involvement in the FTX collapse led to a two-year prison sentence last month.

Her role in the company’s failure caused substantial losses for users, while Sam Bankman-Fried received a nearly 25-year prison sentence earlier this year.

He was ordered to repay up to $11 billion to investors and lenders.

Despite her sentencing, Ellison has been acknowledged for her cooperation with the bankruptcy estate’s efforts.

In a September filing before her sentencing, John J. Ray III, CEO of the FTX bankruptcy estate, emphasized Ellison’s contributions, stating that her cooperation has “resulted in the recovery of hundreds of millions of dollars in Debtor assets for the benefit of creditors.”

SEC Could Challenge FTX’s Stablecoin-Denominated Repayments Plan

Last month, the SEC warned that it may challenge the repayment plan of FTX if the plan involves returning funds to creditors using stablecoins.

SEC attorneys indicated that while repaying creditors with stablecoins might not be outright illegal, the agency reserves the right to contest such repayments if they involve US-dollar pegged crypto assets.

FTX has considered several strategies to make creditors whole, including a shelved plan to revive the exchange.

The latest proposal from FTX involves liquidating assets and settling claims based on the U.S. dollar value of those assets at the time of the exchange’s bankruptcy.

Creditors would be repaid in cash or stablecoins under this plan.

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