Bankrupt Crypto Exchange FTX Strikes Deals With Evolve Bank and SVCF to Recover Up to $21M in Assets

Before FTX's collapse in 2022, Evolve Bank maintained three accounts for West Realm Shires Services Inc., an FTX affiliate, under a Master Bank Services Agreement (MBSA).

Bankrupt cryptocurrency exchange FTX has reached settlement agreements with Evolve Bank and the Silicon Valley Community Foundation (SVCF) that could allow it to recover up to $21 million in assets.

The settlements, which still require court approval, were disclosed in Oct. 30 court filings. A hearing on the matter is set for Nov. 20.

Evolve Bank settlement

Prior to FTX’s collapse in 2022, Evolve Bank maintained three accounts for West Realm Shires Services Inc., an FTX affiliate, under a Master Bank Services Agreement (MBSA).

These accounts held more than $13 million in deposits on behalf of the FTX affiliate.

Initially, Evolve Bank filed a non-customer Proof of Claim for the full balance, citing indemnity and potential legal fees associated with the MBSA. However, the bank did not initially quantify these expenses.

After extensive negotiations, FTX and Evolve Bank agreed on a stipulation whereby the financial institution will promptly return approximately $12.77 million to the defunct firm while retaining $462,698.65 as indemnification expenses.

Additionally, Evolve Bank will waive all current and potential claims against FTX, including indemnity and expense claims under the MBSA.

FTX filed this settlement with the U.S. Bankruptcy Court for the District of Delaware to expedite asset recovery and avoid prolonged litigation.

Silicon Valley Community Foundation settlement

Meanwhile, FTX has also negotiated a settlement with SVCF to recover at least $8,574,674.07 and 34,208.70 FTT (CRYPTO: FTT) without entering litigation.

According to the court filing, former FTX executives Nishad Singh and Caroline Ellison donated 434,500 FTT tokens to the foundation in December 2021.

Between January and November 2022, SVCF sold part of these tokens for $13,625,161, of which $5 million was allocated to external grants. This leaves the organization with a balance of at least $8,574,674.07 and 34,208.70 FTT.

FTX’s bankruptcy team contends that it has valid grounds to reclaim the assets transferred by Singh and Ellison.

Hence, the foundation agreed with the failed exchange to return the $8.57 million and the remaining FTT tokens — less administrative fees and costs — to avoid the need for litigation.

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