FTX Bankruptcy Update: FTX Debtors to Sell Mysten Labs Stake for $95 Million
The beleaguered crypto exchange FTX will reportedly sell its stake in Web3-focused startup Mysten Labs in an effort to pay back its customers.
The new management at FTX is continuing its mission to collect money to return to the victims of the old management’s practices.
The bankrupt company said it would sell the stake in Mysten Labs for $95 million, as reported by Reuters.
Notably, it had paid some $100 million for these preferred shares last year, leading a funding round that valued the Web3 platform at more than $2 billion.
FTX also managed to reach a deal this week to recover $400 million in cash from the Bahamas-based Modulo Capital, a different Reuters report said on Wednesday, citing court documents.
Modulo also gave up its claim to $56 million in assets held on FTX, said the report, adding:
“The settlement recovers most of those payments and takes 99% of Modulo’s remaining assets, according to the filings.”
Speaking of the Bahamas, just this past week, FTX asked a US bankruptcy judge to protect its property from the liquidators in charge of winding down its Bahamas unit, FTX Digital Markets.
It argued in a lawsuit that the liquidators were wrongly claiming ownership of the exchange’s assets, saying that the Bahamian affiliate was a “corporate shell” and the “centerpiece” of founder Sam Bankman-Fried’s effort “to funnel FTX Trading customer deposits and other valuable property and rights to the Bahamas, out of the reach of American regulators and courts.”
Progress in Asset Recovery and Legal Developments
FTX filed for bankruptcy protection in early November last year when it claimed it was unable to completely refund its customers. FTX’s new CEO, John Ray, subsequently said that the top priority was recovering assets to repay the customers.
Then in January this year, FTX attorney Andrew Dietderich said in a federal court that the new management recovered over $5 billion in cash and liquid assets that could be used to repay creditors.
It also recovered a large amount of illiquid cryptoassets and other “nonstrategic investments” made by FTX that had a book value of $4.6 billion, Dietderich said.
Bankman-Fried, the disgraced founder of FTX, was arrested in the Bahamas, extradited to the US, and released from jail after posting a $250m bond in a New York court.
He pleaded not guilty to criminal charges, including bank fraud, conspiracy by misusing customer funds, operating an unlicensed money-transmitting business, and securities and commodities fraud.
Bankman-Fried was charged with four additional criminal counts on top of the eight original charges against him in late February.
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