FTX’s Path to Redemption: Selling Anthropic Shares to Settle Debts

In a significant development for the bankrupt cryptocurrency exchange FTX, Delaware Bankruptcy Court Judge John Dorsey has approved the sale of the company’s shares in the artificial intelligence startup Anthropic, valued at over $1 billion.

Resolving Objections from Customers

According to a report by Cointelegraph, the approval came after FTX addressed concerns raised by some of its customers, who initially objected to the sale. These customers argued that the Anthropic shares were acquired with funds that did not belong to FTX, pointing to evidence from the criminal trial of FTX co-founder Sam Bankman-Fried, which suggested the misuse of customer funds. A compromise was reached, allowing the sale to proceed with the condition that the proceeds could later be claimed by FTX users.

Strategy for User Repayment

Andrew Dietderich, representing FTX through the law firm Sullivan & Cromwell, stated in court that the sale of the Anthropic shares is part of FTX’s broader strategy to liquidate its assets and secure funds for repaying its users. Dietderich emphasized that the proceeds from the Anthropic stake sale would contribute to the $6.4 billion already amassed by FTX, ensuring sufficient resources to compensate any claimants.

FTX’s Investment in Anthropic

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FTX’s involvement with Anthropic began in April 2022 when it invested approximately $530 million in the AI startup, just months before the exchange’s collapse and subsequent Chapter 11 bankruptcy filing in November of the same year. Since then, FTX’s initial stake of over 13.5% was diluted due to additional funding rounds by Anthropic. A recent valuation of Anthropic at $15 billion has significantly increased the worth of FTX’s remaining stake to more than $1.1 billion.

Implications for Creditors and Future Plans

Dietderich also revealed that FTX has abandoned plans to relaunch the exchange, focusing instead on fully repaying its creditors. The repayment plan will consider cryptocurrency prices at the time of FTX’s bankruptcy filing over 15 months ago, a period during which the value of Bitcoin, for example, has seen a substantial increase of over 200%.

The Legal Road Ahead for Sam Bankman-Fried

The court’s decision comes amid ongoing legal challenges for Sam Bankman-Fried, who is set to be sentenced on March 28 after being found guilty of misappropriating over $8 billion in customer funds. Despite his conviction, Bankman-Fried has maintained his innocence and plans to appeal his sentence.

Featured Image via Pixabay

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• Source: https://www.cryptoglobe.com/latest/2024/02/ftxs-billion-dollar-lifeline-court-greenlights-sale-of-stake-in-hot-ai-startup/