Caroline Ellison to Forfeit All Assets in FTX Settlement
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Caroline Ellison, the former CEO of Alameda Research, has agreed to give up nearly all of her remaining assets in a settlement with the now-bankrupt FTX. This agreement comes after FTX filed a motion seeking approval for a settlement to recover assets from Ellison, who played a central role in FTX’s downfall.
The settlement, submitted to the court on October 7, aims to resolve claims against Ellison without prolonged legal battles.
Ellison to Surrender Assets
The court filing outlines that Ellison will transfer any assets that were not previously forfeited to the government as part of her criminal case or set aside for legal fees. In doing so, Ellison is expected to turn over almost everything she owns, apart from a few personal belongings.
Once the agreement is finalized, Ellison will be left with “no remaining assets other than certain physical personal property,” according to the court documents.
FTX says Caroline Ellison to give up ‘all of her assets’ in settlement https://t.co/HEdmSZzgc1 pic.twitter.com/ZPi4jgXcBK
— Crypto Trader Pro 🇺🇸 (@CryptoTraderPro) October 9, 2024
FTX argued that this settlement is preferable to pursuing Ellison through further litigation, as it would provide “substantially all” they could recover through legal action. The settlement will also avoid wasting time and resources in court.
In exchange for the settlement, Ellison will cooperate with FTX in ongoing investigations related to the company’s bankruptcy.
Her role as the former head of Alameda Research and her past relationship with FTX founder Sam Bankman-Fried have made her a key witness in various legal proceedings.
Past Legal Battles and FTX’s Bankruptcy
Ellison’s cooperation with prosecutors in Bankman-Fried’s criminal case has already led to a reduced sentence for her own involvement in the FTX scandal on September 24.
After admitting her role in the fraud, Ellison received a reduced sentence of two years, significantly shorter than what was initially expected. This cooperation has been crucial in the ongoing investigations into FTX’s collapse.
The FTX bankruptcy case, overseen by Judge John Dorsey, has been a long and complex process.
On October 7, the judge approved FTX’s bankruptcy plan, allowing the company to begin the process of repaying its creditors. This came after a US court ordered the bankrupt company to pay $12.7 billion in relief to its customers.
The repayment plan aims to return between 118% and 142% of customers’ claims, a surprisingly high recovery rate for such a significant collapse.
Customers and investors who lost money when FTX filed for bankruptcy in November 2022 could begin to see some recovery.
In July 2023, FTX’s bankruptcy estate launched a lawsuit against Ellison, Sam Bankman-Fried, and other FTX executives. The lawsuit alleged breaches of fiduciary duties, misuse of corporate resources, and fraudulent transfers.
FTX is suing its founder Sam Bankman Fried for $1 billion dollars
FTX new CEO says this is one of the largest financial frauds in history and that SBF used customer funds to buy luxury homes, donate to politicians and make speculative investments pic.twitter.com/XCmsVD6Rf7
— Crypto Tea (@CryptoTea_) July 21, 2023
FTX sought to reclaim $22.5 million in bonuses paid to Ellison in early 2022 and $6.3 million in bonuses she received in 2021. The settlement with Ellison could bring an end to this particular lawsuit.
One of the key benefits of this settlement for FTX is the avoidance of drawn-out litigation. Pursuing legal action against Ellison in a separate court case could deplete her remaining resources, making it harder for FTX to recover assets.
FTX can speed up its efforts to repay creditors and recover as much money as possible by agreeing to this settlement.