2024

BUSD

Galaxy

<p class="is-style-lead">Bankrupt crypto exchange FTX has settled emergent technologies over $600 million in Robinhood stock.</p>
<p>The motion, filed by FTX CEO John Ray III, says the platform is willing to pay Emergent $14 million to cover its administrative costs. In return, <a href="https://crypto.news/tag/ftx/" target="_blank" rel="noopener noreferrer nofollow">FTX</a> wants the firm to drop its claims on Robinhood securities.</p>
<p>According to the latest reports, the company seeks to avoid litigation delays related to the investment firm’s claims over about 55 million seized <a rel="noopener noreferrer nofollow" href="https://crypto.news/tag/robinhood/">Robinhood</a> shares and more than $600 million in cash:</p>
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 <p>The FTX Debtors have worked hard to resolve the other competing interests to clear a path for the U.S. Department of Justice to provide the Robinhood Proceeds and Seized Cash to the FTX Debtors for distribution.</p>
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<p>The FTX settlement will also resolve Emergent’s Chapter 11 bankruptcy in Antigua. The crypto exchange called the agreement “another valuable piece of the puzzle” in its reorganization plan to maximize creditor repayment value. A court hearing on the motion is expected on Oct. 22.</p>
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   <li><a href="#robinhood-stock-disputes" rel="noopener noreferrer nofollow">Robinhood stock disputes</a></li>
   <li><a href="#what-the-ruling-means-for-ftx" rel="noopener noreferrer nofollow">What the ruling means for FTX</a></li>
   <li><a href="#whats-happening-with-ftx-now-latest-updates" rel="noopener noreferrer nofollow">What’s happening with FTX now: Latest updates</a></li>
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<h2 class="wp-block-heading" id="robinhood-stock-disputes">Robinhood stock disputes</h2>
<p>Emergent acquired Robinhood shares in May 2022. In November 2022, FTX filed for bankruptcy, and ownership of the shares became the subject of a dispute between several parties, including FTX, Bankman-Fried, and <a href="https://crypto.news/tag/blockfi/" target="_blank" rel="noopener noreferrer nofollow">BlockFi</a>, a bankrupt cryptocurrency lender.</p>
<p>BlockFi also claimed the shares as collateral for a loan to other Bankman-Fried businesses. The case is further complicated by criminal charges against Bankman-Fried, which include allegations of fraud and misuse of client funds.</p>
<p>The U.S. Department of Justice seized the stock and cash and liquidated Robinhood securities. Robinhood later bought the shares back for about $606 million.</p>
<h2 class="wp-block-heading" id="what-the-ruling-means-for-ftx">What the ruling means for FTX</h2>
<p>FTX, now under the leadership of CEO John Ray III, has been aggressively pursuing asset recovery for creditors. Resolving the Robinhood stock dispute has been a key part of that effort. By striking a deal with Emergent, FTX has secured the ability to liquidate the stock and potentially distribute the proceeds to its creditors.</p>
<p>The potential recovery of $600 million in Robinhood stock is a significant win for FTX creditors, seeking to recoup billions in losses since the exchange’s collapse. While the exact terms of the agreement between FTX and Emergent have not been fully disclosed, the deal will likely pave the way for a substantial payout for those hurt by FTX’s collapse.</p>
<p>The development also signals a broader effort by FTX management to untangle its complex web of assets and liabilities. The company has been embroiled in various legal battles to recover funds lost due to mismanagement, fraudulent practices, and risky investments.</p>
<p>You might also like: <a rel="noopener noreferrer nofollow" href="https://crypto.news/what-awaits-ftx-after-sam-bankman-frieds-25-year-sentence/"> What awaits FTX after Sam Bankman-Fried’s 25-year sentence? </a></p>
<h2 class="wp-block-heading" id="whats-happening-with-ftx-now-latest-updates">What’s happening with FTX now: Latest updates</h2>
<p>According to the latest data, the management of the bankrupt exchange announced overwhelming support from creditors for an updated reorganization plan. The results are expected to pass the threshold required by the Bankruptcy Code for approval by the Delaware District Court. FTX will submit the final figures to the court before the hearing on Oct. 7.</p>
<p>However, the U.S. Securities and Exchange <a href="https://crypto.news/tag/sec/" target="_blank" rel="noopener noreferrer nofollow">Commission</a> told the U.S. Bankruptcy Court in Delaware in late August that it had the right to challenge payments to creditors of the closed cryptocurrency exchange FTX denominated in stablecoins.</p>
<p>According to the regulator, such payments are not technically illegal, but it “reserves the right” to challenge such transactions. The SEC also noted that the current repayment plan does not designate an agent responsible for distributing funds to creditors.</p>
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 <p>The SEC is not opining as to the legality, under the federal securities laws, of the transactions outlined in the Plan and reserves its rights to challenge transactions involving crypto assets.</p>
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<p>However, the crypto community <a href="https://crypto.news/sec-criticized-for-dubious-stablecoin-stance-in-ftx-bankruptcy/" target="_blank" rel="noopener noreferrer nofollow">criticized</a> the Commission’s statement. <a href="https://crypto.news/tag/galaxy-digital/" target="_blank" rel="noopener noreferrer nofollow">Galaxy Digital</a>‘s head of research, Alex Thorn, called another attempt to equate stablecoins with securities “absurd,” given the previously dismissed case against <a href="https://crypto.news/tag/paxos/" target="_blank" rel="noopener noreferrer nofollow">Paxos</a>, the issuer of Binance USD (BUSD).</p>
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   <p lang="en" dir="ltr">the SEC is again reserving the right to claim dollar-backed stablecoins are “crypto asset securities,” despite dropping their enforcement against paxos and losing their MTD on BUSD against binance in july<br><br>this is the height of jurisdictional overreach<br><br>it’s quite absurd if you… <a rel="noopener noreferrer nofollow" href="https://t.co/laT6vY5i6T" target="_blank">pic.twitter.com/laT6vY5i6T</a></p>— Alex Thorn (@intangiblecoins) <a href="https://twitter.com/intangiblecoins/status/1830394148165431612?ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">September 1, 2024</a>
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<p><a href="https://crypto.news/tag/coinbase/" target="_blank" rel="noopener noreferrer nofollow">Coinbase</a>‘s chief legal officer, Paul Grewal, added that the SEC is engaging in “threats and slander” while the market and investors “deserve much better.”</p>
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   <p lang="en" dir="ltr">The SEC didn't outright state that such an action would be illegal, writing, "The SEC is not opining as to the legality, under the<br>federal securities laws, of the transactions outlined in the Plan," but notes that the agency, "…reserves its rights to challenge transactions… <a rel="noopener noreferrer nofollow" href="https://t.co/zAMqY7mTcd" target="_blank">https://t.co/zAMqY7mTcd</a></p>— paulgrewal.eth (@iampaulgrewal) <a href="https://twitter.com/iampaulgrewal/status/1830383985249399093?ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">September 1, 2024</a>
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<p>Thus, the situation regarding payments to creditors, which has been dragging on for several years, is in limbo due to the SEC’s possible displeasure.</p>
<p>You might also like: <a rel="noopener noreferrer nofollow" href="https://crypto.news/the-dispute-between-ftx-and-the-cftc-is-finally-resolved-what-was-it-worth/"> The dispute between FTX and the CFTC is finally resolved: What was it worth? </a></p>

The next chapter in the Robinhood stock saga: What solution FTX offers to the conflict

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