Former Alameda CEO to Surrender Assets in FTX Settlement Deal
In a significant development in the ongoing FTX bankruptcy case, Caroline Ellison, the former CEO of Alameda Research, has agreed to a settlement that will see her forfeit nearly all of her remaining assets to FTX debtors. This move comes as part of the broader efforts to recover funds for creditors affected by the cryptocurrency exchange’s collapse in late 2022.
According to a motion filed on October 7, 2024, Ellison has consented to transfer “substantially all of her assets” not already forfeited to the government or used for legal fees. The filing, which seeks court approval for the settlement, notes that once the terms are met, Ellison will be left with only “certain physical personal property.”
The settlement aims to recover approximately $28.8 million in bonus payments made to Ellison, including $22.5 million from February 2022 and $6.3 million from 2021. Additionally, the agreement covers call options and FTX equity allegedly transferred to Ellison during her tenure at Alameda Research.
FTX argues that this settlement is as beneficial as pursuing further litigation against Ellison, stating it will “recover substantially all of Ellison’s assets.” The company emphasized that continuing legal action would only deplete Ellison’s remaining resources and incur additional costs.
As part of the deal, Ellison has also committed to “cooperate extensively” with FTX’s ongoing investigations and legal proceedings. This cooperation could prove valuable in uncovering further details about the inner workings of FTX and Alameda Research leading up to their collapse.
The settlement comes on the heels of Ellison’s two-year prison sentence, handed down in September 2024 for her role in the FTX fraud case. Her cooperation with federal prosecutors in the case against FTX founder Sam Bankman-Fried, who received a 25-year sentence in March, likely contributed to her reduced sentence.
Bankruptcy Judge John Dorsey approved FTX’s reorganization plan on October 7, with approximately 94% of creditors in the “dotcom customer entitlement claims” class voting in favor. This plan could see former customers and crypto holders recover between 118% and 142% of the value of their claims as of November 2022.
A hearing on the proposed settlement with Ellison is scheduled for November 20. If approved, it will mark another step in the complex process of unwinding the FTX empire and compensating affected parties.
As the FTX saga continues to unfold, the focus remains on asset recovery and accountability. With Ellison’s settlement and ongoing cooperation, creditors and investigators alike hope to gain further insights into one of the most significant collapses in cryptocurrency history.
