By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

FTX’s Bahamas liquidators have struck a deal that will result in a failed crypto bank’s administrator withdrawing a $377.419m claim against the collapsed exchange.

Brian Simms KC, the Lennox Paton senior partner, and the PricewaterhouseCoopers (PwC) accounting duo of Kevin Cambridge and Peter Greaves, in June 30, 2025, legal filings urged both the Delaware Bankruptcy Court and Bahamian Supreme Court to approve the Celsius Network settlement on the basis that it will help “maximise” asset recovery for creditors of FTX’s Bahamian subsidiary.

The agreement, which will see both sides withdraw all claims and litigation against the other, has to be signed-off by both courts. Mr Greaves, in an affidavit filed with the Delaware court, argued that the deal will save “significant time, money and other resources” that would be put to better use returning assets to former clients of FTX Digital Markets, the crypto exchange’s Bahamian affiliate.

Warning that allowing the dispute to persist would be “a drain on estate resources”, Mr Greaves said the only recoveries that the Bahamian FTX liquidator trio would be able to obtain from Mohsin Meghji, the Celsius litigation administrator, should they prevail in court would be attorneys’ fees and associated costs.

“Settling these disputes will allow FTX Digital Markets to focus its efforts on administering the FTX Digital Markets estate in the Bahamas official liquidation without the distraction of ongoing... litigation, which will ultimately maximise distributions to FTX Digital Markets’ creditors,” Mr Greaves added. 

“Withdrawal of the Celsius proof of debt and preferential transfer claims asserted in the Celsius proposed complaint will ensure that FTX Digital Markets’ property will be preserved for the benefit of FTX Digital Markets’ creditors.

“Based on the facts and my understanding of the claims and disputes between the estates of FTX Digital Markets and the Celsius litigation administrator, as presented to me by FTX Digital Markets’ advisors, I concluded that significant time, money and other resources would be necessary to litigate FTX Digital Markets’ claims against the Celsius litigation administrator,” Mr Greaves added.

“This, coupled with the risks and uncertainties related to the settled matters, makes entry into the settlement agreement in FTX Digital Markets’ estate and creditors’ best interests. It is my view that the terms of the settlement agreement are fair and reasonable and should be approved. The settlement agreement provides for a mutually beneficial solution....”

Celsius, which effectively functioned as a digital assets bank, allowed customers to deposit crypto currencies such as Bitcoin and Ethereum with it. They were then able to pledge these assets as security for loans but Celsius, which in May 2022 had lent a collective $8bn to clients and possessed $12bn in assets under management, collapsed just two months later and filed for Chapter 11 bankruptcy protection.

After emerging from Chapter 11 in January 2024, Mr Meghji has been pursuing former Celsius customers who enjoyed a ‘voidable’ or fraudulent preference through being able to withdraw their assets 90 days or less before the bankruptcy filing. He is asserting that some 538 of these withdrawals were made to accounts in the name of FTX Digital Markets, and thus claimed a total $377.419m.

At its core, Celsius’ claim boiled down to who the $377.419m should be paid out to - the litigation administrator for the benefit of creditors, or to the customers and others who are original recipients. It subsequently lodged its claim for this amount with the FTX Digital Markets liquidation in The Bahamas.

However, the failed crypto bank also alleged that its claim would be better dealt with before the New York bankruptcy court, rather than through the Bahamian liquidation process, as some of the transferred assets went to “third parties” who “could not be justly and fairly dealt with” in this nation’s judicial system.

Mr Greaves, in his June 30, 2025, affidavit, disclosed: “After many months of negotiations, FTX Digital Markets and the Celsius litigation administrator have agreed on a global and mutually beneficial settlement...

“The settlement agreement aims to, without any admission by either party, fully and finally settle and resolve all claims and causes of action between the parties, or any rights that are asserted or could have been asserted, in the settled matters. The Settlement Agreement also provides that the parties release each other of all liabilities that each may have in connection with the settled matters.”

Mr Greaves said the Bahamian liquidation trio were also being given the go-ahead by the Celsius administrator to return assets to FTX Digital Markets customers free from any possible challenge to these distributions.

“Both parties are agreeing to withdraw all litigation in relation to the settled matters against the other estate with prejudice. No further expenditure on litigation or drain on estate resources will be necessary,” he added. “The settlement agreement is the product of extensive, good faith discussions and arm’s length bargaining between FTX Digital Markets and the Celsius litigation administrator.”