Fintech firm Dave has decided to distance itself from the troubled crypto exchange FTX. Dave announced its plan to repurchase a $100 million convertible promissory note from FTX Ventures, the venture capital arm of FTX. This development comes as a response to the bankruptcy and legal challenges surrounding FTX.

The Financial Mechanics of the Buyback

The agreement outlines that Dave will acquire the note for $71 million, a significant discount from its original value. This transaction is pending a bankruptcy court’s approval, with a hearing scheduled for January 25th. The convertible promissory note, a common financial instrument in the startup world, represents a loan that could be converted into company equity.

Dave’s Continued Expansion and Evolution

Despite the complexities arising from its association with FTX, Dave continues to innovate and grow. The company, known for its no-fee checking accounts and cash advance services, has raised over $536.3 million across nine funding rounds. In 2023, Dave secured $50 million through a debit emission, underscoring its financial resilience and commitment to expanding its service offerings.

The fintech firm initially partnered with FTX in March 2022, a collaboration that included integrating cryptocurrency payments on its platform. However, following the collapse of FTX, Dave has steered clear of the crypto space, focusing instead on its core financial services. Adding to its innovative edge, Dave introduced an AI-driven chatbot, DaveGPT, in December, further enhancing its customer service capabilities.

Aftermath of FTX’s Downfall

The fall of FTX has had wide-reaching implications across the financial technology sector. FTX debtors have been actively seeking to liquidate assets to repay creditors, with several approvals granted by the court for asset sales. This includes divestments of LedgerX and other high-value assets.

Meanwhile, FTX founder Sam Bankman-Fried faces legal consequences, having been found guilty of multiple counts of fraud and conspiracy. His sentencing is set for March 28, 2024. The FTX saga highlights the volatility and risks inherent in the crypto market, serving as a cautionary tale for fintech firms worldwide.

Read Also: BitMEX to Send 1 Physical Bitcoin (BTC) to the Moon, Here’s How

The post Just In: FTX Sells $100M Stake to Dave for $71M in Court Deal appeared first on CoinGape.

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Filed under: News - @ January 1, 1970 12:00 am