FTX Settles for $33M Over Failed Europe Expansion

FTX, the crypto exchange, has recently settled a lawsuit totaling $33 million, stemming from its unsuccessful European expansion. The settlement follows a legal battle over FTX’s acquisition of a European startup for $323 million, which the company has now agreed to sell back to its original founders for $32.7 million.

Documents filed in Wilmington, Delaware bankruptcy court reveal that FTX determined no viable buyers existed for its European subsidiary, FTX Europe. The settlement, deemed the optimal outcome for FTX creditors, brings an end to a dispute over alleged misuse of FTX customer funds in the acquisition.

FTX had initially sued the founders of Digital Assets DA AG, based in Zurich, Switzerland, now FTX Europe, citing a substantial overpayment for a company that was not fully operational at the time of purchase. The defendants, including DA AG founders Patrick Gruhn and Robin Matzke, denied these claims and counter-sued FTX for $256.6 million.

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FTX cited the high costs and time investment of litigating these claims, particularly as key witnesses like FTX founder Sam Bankman-Fried faced legal issues, as reasons for pursuing the settlement. Matzke expressed satisfaction with the resolution, emphasizing support for prompt payouts to EU clients amidst FTX’s troubled international expansion.

In addition to this settlement, FTX has pursued legal action against various entities, including a former FTX lawyer, founders of Embed stock trading platform, bankrupt crypto firms, and investment firm K5, known for its political and celebrity ties.