As a seasoned researcher who has followed the tumultuous crypto landscape for years now, I find myself intrigued by this recent development involving FTX and Caroline Ellison. It seems we are witnessing another chapter unfolding in the saga of one of the most influential figures in the crypto world.
In a recent turn of events, the newly appointed FTX management has put forth a motion aiming for a settlement agreement with Caroline Ellison, a previous head at Alameda Research. This proposed agreement might involve Ellison liquidating all her possessions.
On October 7th, a motion was submitted on that day, aiming to grant court approval for the settlement with Caroline Ellison. Earlier, the head of Alameda Research consented to hand over any assets seized by the US government in the criminal case or used as legal fees benefiting FTX creditors.
Additionally, the proposed motion states that if Ellison adheres to the conditions, “Ellison will be left with only some tangible personal belongings as her sole possessions.” Yet, the motion fails to disclose the worth of the assets that Ellison might relinquish.
Moreover, Ellison consented to lend a hand in both the investigations and the court cases concerning the bankrupt crypto exchange. This could potentially entail providing documents and shedding light on her past roles as the former leader of FTX’s affiliated trading firm and the ex-partner of the exchange’s founder, Sam Bankman-Fried.
Additionally, FTX argued that the settlement was beneficial because it provided “nearly all they could obtain” and continued to pursue Ellison in another case as additional cooperation from her might yield more value.
It was mentioned that taking legal action would deplete Ellison’s remaining finances, as well as demand significant amounts of his time and money.
FTX and Its Lawsuit against Caroline Ellison
In July 2023 last year, the bankruptcy administration of crypto exchange FTX filed a lawsuit against Caroline Ellison. The lawsuit accuses Ellison of misusing company assets, violating her duties as a trustee, and making fraudulent transfers. The legal action aims to recover approximately $28.8 million in bonus payments from February 2022 and 2021, along with the alleged transfer of call options and FTX shares to Ellison’s possession.
According to recent updates, a hearing for the proposed settlement is scheduled for November 20th. So far, Ellison has been fully cooperative with federal investigators in the criminal case against Sam Bankman-Fried. In light of her cooperation, the judge shortened her sentence to two years, which she began serving last month on September 24.
On October 7th, Bankruptcy Judge John Dorsey endorsed FTX’s bankruptcy proposal, enabling previous clients and cryptocurrency owners to potentially recover up to 142% or even more than their original claim values, as of the time FTX declared bankruptcy in November 2022.
According to the court-sanctioned distribution plan for FTX creditors, they are expected to receive over $12 billion in the near future. This has sparked speculation among analysts that some of this cash may return to digital assets, potentially injecting fresh liquidity and serving as a price catalyst for markets currently struggling with liquidity issues. Benjamin Celermajer, co-chief investment officer at Magnet Capital, expressed this viewpoint by stating that the forthcoming FTX payouts could essentially supply funds to established crypto traders, making it highly probable that we witness some of these funds being re-invested into cryptocurrency.
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2024-10-09 13:21