Mariia Shalabaieva
Dave, a fintech firm, announced its intent to purchase a $100 million convertible note from FTX Ventures, the venture capital arm of the now-defunct cryptocurrency exchange FTX. The agreement involves buying the note at a discounted price of $71 million, subject to the approval of a bankruptcy court, with a hearing scheduled for January 25.
A convertible note is a common financial instrument in the startup world, essentially a loan that can later be converted into equity in the company. Dave provides financial services through a mobile app, including savings accounts, cash advances, and expense accounts. As per Crunchbase, Dave has raised a total of $536.3 million in funding over nine rounds, with the latest funding achieved through a $50 million debt issuance in September 2023.
In March 2022, Dave partnered with FTX to offer cryptocurrency payments on its platform, which also included a $100 million investment from FTX Ventures. Several investments, payments, and donations made by FTX and its subsidiaries prior to its bankruptcy in November 2022 have been claimed by the bankruptcy court.
On December 19, FTX debtors announced a global settlement with the official joint liquidators of the company’s Bahamian subsidiary as part of bankruptcy proceedings. The companies described the agreement as a novel and mutually beneficial solution based on transborder legal issues.
FTX Debtors have filed multiple requests since November 2022 to liquidate the company’s assets to pay creditors. A court has approved several sales, including the divestiture of LedgerX, the sale of trust assets valued at $873 million, and the liquidation of digital assets worth $3.4 billion, along with a settlement resolving issues between FTX and Genesis.
Of the approximately $8,700 million in misappropriated customer funds, at least $7,000 million in assets have been recovered. FTX founder Sam Bankman-Fried was found guilty of multiple charges, including wire fraud and conspiracy, with sentencing scheduled for March 28, 2024.
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