FTX Reaches a Settlement with K5 Global, Advancing Its Recovery Plan

FTX has reached a settlement with K5 Global, a venture capital firm, to resolve a lawsuit filed in June 2024.

Bankrupt crypto exchange FTX has reached a settlement with venture capital firm K5 Global over a lawsuit filed in June 2024, a move that will help advance the exchange's recovery plan. The settlement was announced by FTX on its official "X" account.

The agreement was confirmed in a joint statement by FTX Trading Ltd. and the FTX Recovery Trust, which will enable both entities to move forward by combining their efforts in the recovery operations.

"We are pleased to announce that FTX Trading and the FTX Recovery Trust have reached an agreement in principle to settle the K5 litigation," said John J. Ray III, CEO of the FTX Recovery Trust.

"This agreement will resolve substantial debts and advance our collective goal of restoring the company to the benefit of FTX's creditors and stakeholders."

Ray highlighted K5 Global's role as a significant player in FTX's investment portfolio, which led to the company's decision to pursue the settlement.

"When we began working with FTX, we quickly realized that K5 was a material asset in the estate," said Ray, referring to K5 co-founders Michael Kives and Bryan Baum.

"K5's investments are expected to generate substantial value for the company's stakeholders and the estate, which will benefit from this agreement."

In response, the co-founders of K5 Global issued a formal statement, expressing their gratitude toward the FTX team and CEO John Ray for their partnership in the cooperation.

"We appreciate the opportunity to work with the FTX team, led by John Ray, to achieve this outcome, which will contribute to the recovery efforts at FTX," the company members stated.

"We believe that this agreement will help ensure that the company's stakeholders are fairly compensated."

The settlement comes after FTX received U.S. Bankruptcy Court approval for its Chapter 11 reorganization plan. The court approved the plan, which was then implemented on January 3, 2025, with the company also announcing the establishment of a distribution record date for claim holders on the same day.

FTX announced that the first fund distribution to stakeholders will occur within 60 days following January 3, 2025. To receive their portion of the share, investors must complete all legal obligations, specifically including Know Your Customer (KYC) requirements. The distribution process will also involve security measures to ensure fair payment methods.

With this agreement, FTX moves closer to recovering from its bankruptcy collapse. The company is now focused on rebuilding trust through its efforts in resolving court cases and disputes while simultaneously progressing in its reorganization process.

The organization is prioritizing payments to its creditors and the development of its business operations.