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    Banking app Dave to buy back $100M stake from FTX

    2024.01.07 | exchangesranking | 124onlookers

    Fintech firm Dave has announced an agreement to purchase a $100-million convertible promissory note previously issued to FTX Ventures, the venture capital arm of bankrupt crypto exchange FTX.

    As per the agreement, Dave will purchase the note for $71 million at a discounted price. The deal is pending approval from a bankruptcy court, with a hearing scheduled for Jan. 25. A convertible promissory note is a financial instrument commonly used by startups. It’s essentially a loan that can be turned into a share of the company later.

    Dave offers financial services via a mobile application, including savings accounts, cash advances and spending accounts. According to the company’s Crunchbase profile, it has raised a total of $536.3 million in funding over nine rounds. The latest funding for Dave was secured through a $50-million debit emission in September 2023.

    The fintech firm partnered with FTX in March 2022 to provide cryptocurrency payments on its platform. The partnership also included a $100-million investment from FTX Ventures.

    Several investments, payments and donations made by FTX and its subsidiaries over the months prior to the bankruptcy in November 2022 were reclaimed by the bankruptcy court.

    In a Dec. 19 announcement, FTX debtors announced a global settlement with the Joint Official Liquidators for the firm’s Bahamian arm as part of bankruptcy proceedings. The firms said the settlement was a “novel and mutually-beneficial solution” based on cross-border legal issues.

    FTX debtors have filed multiple requests to liquidate the company’s assets to repay creditors since November 2022. A court has granted approval for several sales, including the divestment of LedgerX, the sale of trust assets valued at $873 million, the liquidation of digital assets worth $3.4 billion and an agreement resolving issues between FTX and Genesis.

    Of the roughly $8.7 billion in misappropriated customer funds, at least $7 billion in assets have been recovered. FTX founder Sam Bankman-Fried was found guilty of two counts of wire fraud, two counts of wire fraud conspiracy, one count of securities fraud, one count of commodities fraud conspiracy and one count of money laundering conspiracy on Nov. 2. His sentencing has been scheduled for March 28, 2024.

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