FTX Sues SBF Over $220 mn Pre-Bankruptcy Deal
With regard to the $220 million purchase of stock-clearing platform Embed, FTX attorneys are suing former CEO Sam Bankman-Fried, co-founder Zixiao Wang, and former senior employee Nishad Singh, alleging lack of due diligence.
FTX reportedly paid $220 million to acquire Embed through its American subsidiary on May 17 despite having allegedly “performed almost no due diligence” on the platform.
After FTX filed for bankruptcy, the judge in charge of the proceedings approved the sales of Embed and other assets of FTX, but the top bidder for the platform offered just $1 million, with FTX’s lawyers stating:
“The bidders had figured out what the FTX Group and FTX Insiders did not bother to assess prior to the Embed acquisition, namely, that Embed’s vaunted software platform was essentially worthless.”
Twelve organisations had made non-binding indications of interest, the highest of which was $78 million; but, after completing more thorough due diligence, all but one of them—Embed’s founder and former CEO, Michael Giles—decided not to submit a final offer.
(With inputs from Shikha Singh)
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