FTX has entered into a settlement agreement with the former head of Alameda Research

What’s new? The managers of the bankrupt crypto exchange FTX filed a motion in court asking the court to approve a settlement agreement with Caroline Ellison, under which she will transfer almost all of her assets to the company. Ellison was previously the head of FTX-affiliated hedge fund Alameda Research. After the collapse of FTX, she pleaded guilty to complicity in the theft of billions of dollars in client assets and testified against the exchange’s founder and head, Sam Bankman-Fried, with whom she was previously in a relationship. He was sentenced to 25 years in prison in March 2024.

Material by Cointelegraph

What else is known? Ellison herself in September of this year, thanks to cooperation with prosecutors, received only 2 years in prison, as well as a fine of $11 billion.

After negotiations with court-appointed FTX managers, she agreed to give the exchange any assets that were not seized by law enforcement in her personal criminal case and were not used to pay fines.

The motion notes that Ellison will have no assets left after the terms of the agreement are fulfilled, except for certain personal property. It does not specify how much money will be transferred to FTX to reimburse customers and investors.

Ellison has also agreed to cooperate with the FTX bankruptcy court. She can provide documents and information she obtained while she was head of Alameda and a Bankman-Fried girl.

FTX sued Ellison in July 2023, alleging breach of fiduciary duty, misappropriation of corporate assets, and fraudulent transfers. The company sought to recover $28,8 billion from her.

FTX notes the importance of the settlement agreement as it will provide additional valuable insights, although assets in favor of creditors would have been seized in its absence. In addition, continuing the litigation would have incurred additional legal costs.

The court will consider FTX’s motion on November 20.

Earlier, the court approved a payment plan for FTX clients, according to which the amounts of compensation will be assessed at the rates of cryptocurrencies at the time of bankruptcy in November 2022. This is many times lower than the current ones. According to the document, clients will receive 118-142% of the amount of claims at the old rates.