Ex-CEO of Alameda to deliver yacht and apartments to FTX debtors

Sam Trabucco, the former co-CEO of Alameda Research and a close associate of FTX founder Sam Bankman-Fried, has reached a preliminary settlement with creditors of the now-defunct cryptocurrency exchange.

In a proposed settlement, Trabucco agreed to give up several high-value assets to help pay the bankrupt company’s debts.

The settlement agreement

According to a Nov. 11 court document, the former Alameda executive will transfer legal ownership of two apartments he bought in San Francisco in 2021 for $8.7 million. He will also give up a 53-foot yacht he acquired for $2.51 million in March 2022 at the height of the crypto market boom.

The 31-year-old will also transfer to FTX’s debtors all rights to the exchange’s customer deposits in his name, valued at approximately $70 million in claims. Once transferred, these claims will be cancelled. The filing states that he had received about $40 million in “potentially avoidable transfers” from the plaintiffs during his two years at the trading company.

FTX’s legal representatives expressed confidence in the strength of its claims against Trabucco, indicating that they believe a lawsuit would likely succeed if pursued. “The debtors maintain that they have meritorious claims and would prevail against Trabucco in an adversarial proceeding,” the file states.

However, the lawyers acknowledged that the resources needed for litigation could prove costly and time-consuming. They further stated that a successful lawsuit against him could yield less than the amount secured through this proposed settlement.

The deal is still subject to approval by a federal judge in Delaware, who will review the terms at a hearing set for Dec. 12.

Trabucco could avoid further actions by creditors

Sam Bankman-Fried named Trabucco co-CEO of Alameda Research along with Caroline Ellison in August 2021, jointly overseeing the company’s operations. In November 2022, Alameda, FTX and related entities filed for bankruptcy after discovering gross mismanagement of client funds.

The former executive had resigned just months earlier, in August 2022, citing a desire to focus on personal growth. Although he has never publicly acknowledged any involvement or awareness of wrongdoing within the company, he occasionally posted to X about high-risk trades and aggressive strategies.

If approved, the latest settlement would likely prevent further legal action by FTX’s creditors against Trabucco, effectively ending its legal obligations in the event of the exchange’s bankruptcy.

The fallout from FTX’s collapse has had legal ramifications for several of Trabucco’s former colleagues. Its co-CEO, Caroline Ellison, was recently sentenced to two years in prison after cooperating with prosecutors. Meanwhile, Bankman-Fried received a 25-year prison sentence.

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