Fintech firm Dave has entered into a deal to acquire convertible promissory notes worth $100 million from FTX Ventures, the investment branch of the now-bankrupt cryptocurrency exchange FTX. Dave plans to buy these notes for $71 million, a price reduction from their original value. This transaction is pending approval from a bankruptcy court, with a hearing set for January 25. Convertible promissory notes are loans that can be converted into company equity and are often used by startups.
Dave, known for providing financial services such as savings, cash advances, and spending accounts via its mobile app, has amassed $536.3 million across nine funding rounds, as per its Crunchbase profile. Its most recent funding was a $50 million debt offering in September 2023. Dave had formed a partnership with FTX in March 2022, integrating cryptocurrency payments into its platform and receiving a $100 million investment from FTX Ventures.
Since the bankruptcy of FTX in November 2022, the bankruptcy court has been working on recouping various investments, payments, and donations made by FTX and its related entities before its collapse.
On December 19, FTX Debtors reached a comprehensive settlement with the joint official liquidators of its Bahamas-based division, a move seen as an innovative and mutually advantageous solution to complex international legal challenges. Post-November 2022, FTX debtors have repeatedly sought court permission to sell the company’s assets to pay back creditors. Several sales have been sanctioned by the court, including the divestiture of LedgerX, the sale of trust assets valued at $873 million, the liquidation of $3.4 billion in digital assets, and a deal to settle disputes between FTX and Genesis.
Out of the roughly $8.7 billion in misused customer funds, assets worth at least $7 billion have been reclaimed. FTX's founder, Sam Bankman-Fried, was convicted on November 2 on multiple charges including wire fraud, conspiracy to commit wire fraud, securities fraud, commodities fraud conspiracy, and conspiracy to commit money laundering. His sentencing is scheduled for March 28, 2024.
