FTX Debtors Strike $700M Deal with K5 Global to Wrap Up Bankruptcy Drama

Seven months after suing K5 Global for $700 million in disputed investments, FTX Debtors have settled with the venture capital firm.

This is a step towards maximizing recoveries for FTX stakeholders but terms are not disclosed.

FTX CEO John Ray III called the settlement mutual and said K5 Global is a “bright spot” in FTX’s portfolio. They have agreed to use their resources to help with asset recovery which is key to paying back creditors.

The lawsuit filed June 2024 alleged K5 co-founder Michael Kives used his political connections to help former FTX CEO Sam Bankman-Fried (SBF) siphon off customer funds. Kives a former aide to Huma Abedin had many connections in political and financial circles – connections SBF allegedly used.

This is part of FTX’s effort to recover funds and pay back creditors in the bankruptcy process.

FTX’s Legal Battles and Settlements

FTX is settling multiple big cases as it winds down.

• LayerZero Settlement: FTX sued LayerZero Labs in 2023 for $86 million related to a share deal with Alameda Research before FTX went down. LayerZero has now wrote down their $11.5 million investment to zero as part of the settlement.

• Anthony Scaramucci Dispute: In November 2024, FTX filed to get back $67 million from SkyBridge Capital’s Anthony Scaramucci.

• Sam Trabucco’s Forfeited Funds: Former Alameda Research co-CEO Sam Trabucco returned $70 million as part of FTX’s asset recovery.

These are part of FTX’s effort to get back funds from partners and executives involved in shady financial dealings before FTX went down.

FTX’s Creditor Repayment Plan

After months of legal battles, FTX has started a claims process to pay back creditors. They have allocated $6.5 billion for this and it will take a few weeks.

More to relieve pressure:

• FTX EU to Backpack: This will pay back all creditors in the EU

• Strategic asset sales to add more liquidity

With big cases settled and a repayment plan in place FTX’s bankruptcy seems to be winding down but timeline for full creditor payment is still unclear.