- The settlement involves selling FTX Europe back to its founders.
- FTX Europe was found to be non-operational at the time of purchase.
Bankrupt crypto exchange FTX has settled a lawsuit involving its failed European expansion, agreeing to pay $33 million instead of the initially sought $323 million, Reuters reported.
FTX Europe, acquired by FTX in 2021, was deemed not operational at the time of purchase. Despite counterclaims and legal complexities, the settlement marks a resolution as FTX navigates its bankruptcy proceedings and attempts to reimburse creditors.
Subsequently, FTX has settled the legal dispute resulting from its European expansion efforts. The exchange, having acquired Zurich-based Digital Assets DA AG and rebranded it as FTX Europe in 2021, found itself embroiled in a lawsuit after deeming the acquisition a significant overpayment.
FTX alleged that the European subsidiary reportedly lacked substantial operational presence at the time of acquisition and was merely a concept on paper.
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European Expansion and Legal Fallout
FTX has agreed to sell back FTX Europe to its founders for $32.7 million, significantly lower than the initial sought amount. The settlement represents a fraction of the sum initially pursued by FTX.
FTX and its US counterpart, FTX US, filed for bankruptcy in 2022. The announcement came swiftly after Sam Bankman-Fried (SBF), the CEO of FTX, stepped down from his position. Notably, subsidiaries like LedgerX LLC and FTX Digital Markets Ltd. were excluded from the bankruptcy proceedings.