According to a Wednesday report, the bankrupt cryptocurrency exchange FTX reached an agreement with an investment fund Modulo Capital for the return of $404 million. Furthermore, the fund’s managers will renounce their $56 million claim against FTX. The deal is yet to be approved by Judge John Dorsey.

Module Will Return $404 Million to FTX, Renounce $56 Million Claim

The collapsed cryptocurrency exchange FTX reportedly recently reached an agreement with Modulo Capital, an investment fund, which will see the return of $404 million to the bankrupt company. The deal is, however, said to be worth a total of $460 million as Xiaoyun “Lily” Zhang and Duncan Rheingans-Yoo, the managers of the fund, also agreed to drop their $56 million claim against FTX.

Today’s agreement pertains to a transfer totaling $475 million from FTX to Modulo made by Sam Bankman-Fried in 2022, prior to the former’s bankruptcy. While the deal is intended to avoid a potentially costly lawsuit between the collapsed exchange and the investment fund. It has yet to be approved by Judge John Dorsey.

The deal represents the latest step in FTX’s efforts to recover lost and misplaced assets. A recent filing revealed that the company had a discrepancy worth nearly $7 billion between assets and liabilities at the time of the chapter 11 filing. The company’s current CEO, John J. Ray III commended on multiple occasions on the difficulties of recovering assets, mostly due to poor record-keeping under the previous management and the recent updates still state there are “massive shortfalls”.

FTX’s Many Asset-Recovery Lawsuits

In January 2023, John J. Ray III, FTX’s current CEO and the man best known for captaining Enron’s bankruptcy, called the recovery of the company’s assets a “Herculean effort”. Considering the poor record-keeping, and prevalence of comingling of users’ assets, and other shady activities like the hidden loans worth billions of dollars made to FTX’s executives and facilitated by Alameda Research, the description is probably very apt.

As a result, FTX has recently engaged in a number of lawsuits in an attempt to recover funds. Perhaps the biggest of these is the one filed against Grayscale. The suit seeks to recover at least $9 billion, lower fees and alleges that Grayscale is unjustly preventing investors from accessing their assets. Grayscale called the lawsuit “misguided”.

More recently, FTX sued liquidators in the Bahamas claiming they have wrongfully claimed ownership over some of the exchange’s assets. The island nation’s liquidators have been at odds with the company’s US management since the bankruptcy but appeared to have buried the hatchet in early January.

This article originally appeared on The Tokenist

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