- Dave has agreed to buy back a $100 million stake in the company previously owned by now-bankrupt FTX. Dave will purchase the stake for $71 million at a discounted rate, pending court approval.
- The stake was originally purchased by FTX Ventures, the VC arm of FTX, when the companies partnered in March 2022. The partnership enabled crypto payments through Dave’s banking app.
- This deal is the latest in FTX’s ongoing bankruptcy proceedings after its November 2022 collapse. Administrators have recovered around $7 billion so far, including through a recent settlement with FTX’s Bahamas subsidiary.
The financial technology company Dave has announced an agreement to buy back a $100 million stake previously held by the now-bankrupt cryptocurrency exchange FTX.
Background on the Dave-FTX Relationship
Dave partnered with FTX in March 2022 to enable cryptocurrency payments through its banking app. As part of this, FTX Ventures, the venture capital arm of FTX, invested $100 million into Dave.
Details of the New Agreement
Under the new agreement, Dave will purchase a $100 million convertible note from FTX for $71 million, at a discounted rate. This deal requires approval from the bankruptcy court overseeing FTX’s Chapter 11 proceedings.
A convertible note is a loan that can later be converted into an equity stake in the company. The agreement allows Dave to buy back the sizable stake FTX previously held after FTX’s collapse.
The Ongoing FTX Bankruptcy Case
FTX entered bankruptcy proceedings in November 2022 after a liquidity crisis led to billions in missing customer funds.
Since then, FTX bankruptcy administrators have worked to sell off company assets and recover lost funds. Recently, they reached a settlement deal with FTX’s Bahamas-based subsidiary.
In total, administrators have recovered around $7 billion so far. FTX founder Sam Bankman-Fried faces criminal charges related to fraud and money laundering. His sentencing hearing is scheduled for late March.
The bankruptcy proceedings are complex but ongoing. The deal with Dave is the latest development as FTX’s estate is slowly unwound.