FTX Announces Caroline Ellison Will Hand Over Nearly All Assets in Settlement

FTX, the bankrupt crypto exchange, has announced that Caroline Ellison, the former CEO of Alameda Research, has agreed to transfer nearly all of her remaining assets to the company.

This move comes as part of a settlement between Ellison and FTX’s bankruptcy estate. The announcement was made in an Oct. 7 court filing, which disclosed the details of the agreement.

The settlement follows Ellison’s earlier forfeitures to the U.S. government and payments for her legal expenses. FTX’s bankruptcy estate will receive a substantial portion of what Ellison still owns, marking a key development in the ongoing efforts to recover funds lost in the exchange’s collapse in November 2022.

Settlement Agreement and Asset Transfer

Caroline Ellison’s decision to transfer nearly all of her remaining assets to FTX is part of a lawsuit settlement aimed at recovering about $30 million. These funds include payments and FTX securities that were transferred to her before the company’s collapse. The agreement between Ellison and FTX was filed in the U.S. Bankruptcy Court for the District of Delaware.

According to court documents, Ellison will turn over most of her available cash and assets to settle the litigation. FTX’s bankruptcy estate stated, 

“Following the settlement, Ellison will have no remaining assets other than certain physical personal property.” 

This settlement also includes a commitment from Ellison to cooperate with professionals managing the winding down of FTX’s estate. Her cooperation is expected to help generate additional value for creditors.

Role in FTX Collapse and Legal Proceedings

Ellison, who led Alameda Research, was a central figure in the collapse of FTX and its related entities. Her role in the multibillion-dollar scheme that involved misappropriating customer funds led to her being sentenced to two years in prison. Ellison’s cooperation with federal prosecutors made her a key witness in the case against Sam Bankman-Fried, the former CEO of FTX.

The agreement to transfer her assets to FTX is a further step in distancing herself from her previous involvement with Bankman-Fried’s crypto empire. As part of the settlement, Ellison has also committed to aiding in ongoing investigations and litigation related to the bankruptcy.

Since FTX filed for bankruptcy in November 2022, the company and its related entities have been under the leadership of CEO John J. Ray III. FTX has been working to repay customers whose digital assets were trapped on the platform during its collapse. The announcement of the settlement with Ellison came on the same day that FTX received court approval for its plan to repay customers.

Ellison’s asset transfer is seen as an important part of the recovery efforts, as it aims to recoup some of the lost funds for the company’s creditors. The next step in the bankruptcy proceedings is a hearing scheduled for Nov. 20, which will further address the details of the settlement and other aspects of the case.

Legal Representation and Case Details

FTX is represented in the bankruptcy case by Sullivan & Cromwell LLP and Landis Rath & Cobb LLP, while Ellison is represented by Wilmer Cutler Pickering Hale and Dorr LLP. The case is filed under In re FTX Trading Ltd., Bankr. D. Del., No. 22-11068, and continues to progress as FTX works through its complex legal and financial challenges.