- Caroline Ellison, former director of Alameda Research, reached a settlement with FTX and handed over nearly all of her assets to help compensate FTX’s creditors after the company’s collapse.
- A Delaware bankruptcy judge approved FTX’s reorganization plan, which was supported by 94% of creditors. This plan will allow for the recovery of some of the losses incurred through the liquidation of the assets and the cooperation of Ellison.
- Caroline Ellison, sentenced to two years in prison, is playing a key role in the FTX investigation by fully cooperating with authorities, which has already led to the recovery of hundreds of millions of dollars worth of assets for creditors.
Caroline Ellisonformer director from Alameda Research, trading company associated with FTXentered into an agreement with the bankrupt estate of FTX, will sell most of its assets in order to terminate the complaint filed against it. The decision follows Monday’s approval of FTX’s reorganization plan by a US bankruptcy judge.
A settlement aimed at recovering funds for creditors
After the settlement, Ellison will have no assets other than certain physical personal property.
In a motion filed this Monday FTX Trading Ltd. clarified that Ellison agreed to the transfer”almost all his possessions”, excluding those already seized by the government or intended to cover its legal costs, from FTX debtors. This Agreement also includes a commitment from Ellison has”cooperate fullywith the bankruptcy nature of FTX as part of current and future investigations.
FTX’s bankruptcy, declared in 2022, led to lawsuits against Sam Bankman-Friedfounder of FTX, Ellisonand several other former leaders. FTX borrowers are trying to recover as many assets as possible to compensate creditors for their losses. The management is mainly aimed at recovering approx $22.5 million in bonuses transferred to Ellison in February 2022 and also paid $6.3 million in July and September 2021.
FTX reorganization plan approved
Delaware County Bankruptcy Court Judge John Dorsey approved FTX’s reorganization plan during a hearing Monday. This plan received the support of 94% of class creditors”dotcom customer requirements,” representing approximately $6.83 billion in claims. This plan should allow lenders to recoup some of the funds lost during the spectacular collapse of the FTX empire.
Key role in the FTX investigation
THE Caroline Ellison’s role in the collapse of FTXalthough incriminated, he took a different course compared to the other leaders, mainly due to his cooperation with the authorities. Already sentenced to two years in prison for her involvement in the affair, she agreed to facilitate the ongoing investigation. In the September statement John J. Ray IIIthe current CEO of the bankrupt FTX, praised her help, noting that “enabled hundreds of millions of dollars in assets to be recovered for the benefit of creditors.
Consequences of the FTX collapse
Sam Bankman-Friedfounder of FTX and former Ellison partner, was sentenced to almost 25 years in prison last March. His punishment includes duty repay up to 11 billion dollars in losses suffered by investors and lenders on the platform.
This episode represents another step in FTX’s efforts to redress some of the massive losses caused by mismanagement and fraudulent activities that led to the cryptocurrency giant’s downfall. Ellison’s cooperation is seen as key to efforts to restore justice for the victims of the FTX collapse.
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