SCHEDULE: FTX Recovery Trust Discloses 21.6% Stake in Exodus

The FTX Recovery Trust has disclosed its beneficial ownership of 21.6% of Exodus Movement, Inc.'s Class A Common Stock, acquired as part of the FTX Trading Ltd. Chapter 11 reorganization plan.

Summary

• FTX Recovery Trust, a Delaware statutory trust, now beneficially owns 1,823,486 shares of Exodus Movement, Inc.'s Class A Common Stock.
• This represents 21.6% of the total 9,412,670 outstanding shares as of May 22, 2025.
• The shares were acquired on January 3, 2025, the effective date of the "Second Amended Joint Chapter 11 Plan of Reorganization of FTX Trading Ltd. and its Debtor Affiliates."
• No funds were used for this acquisition; the shares were transferred from FTX Trading Ltd. and its subsidiaries (the Debtors) to the Trust as part of the bankruptcy plan.
• The primary purpose of the Trust is to liquidate its assets, including these shares, to make distributions to former creditors and stakeholders of the Debtors.

Sentiment

Score: 4

Explanation: The sentiment is moderately negative for Exodus Movement, Inc. due to the significant block of shares (21.6%) now held by the FTX Recovery Trust, whose stated purpose is liquidation. While the transfer itself is an expected outcome of the FTX bankruptcy, the future disposition of such a large stake creates potential selling pressure and uncertainty for Exodus's stock price. For the FTX Recovery Trust, this is a neutral event as it's part of their mandate.

Positives

• The transfer of shares to the FTX Recovery Trust is a step forward in the resolution of the FTX bankruptcy proceedings, providing clarity on asset distribution.
• The Trust's stated intention to monitor and evaluate its investment, and potentially engage with Exodus management, could lead to constructive dialogue regarding the Issuer's strategic direction.

Negatives

• The FTX Recovery Trust's primary purpose is to liquidate its assets, which includes the 21.6% stake in Exodus Movement, potentially leading to significant selling pressure on Exodus's stock when the Trust decides to dispose of the shares.
• A large block of shares held by an entity with a liquidation mandate introduces uncertainty regarding future stock price performance for Exodus Movement.

Risks

• Potential for significant selling pressure on Exodus Movement's Class A Common Stock if the FTX Recovery Trust liquidates its 1,823,486 shares (21.6% stake) in open market transactions.
• Uncertainty regarding the timing and method of the Trust's disposition of shares, which could impact market sentiment and stock volatility for Exodus Movement.
• The Trust may seek to influence Exodus Movement's operations, management, corporate governance, or capital structure, potentially leading to strategic shifts.

Future Outlook

The FTX Recovery Trust intends to monitor and evaluate its investment in Exodus Movement, Inc. on an ongoing basis, with the primary goal of liquidating these assets to distribute proceeds to former creditors and stakeholders of the FTX Debtors. The Trust may acquire additional securities or dispose of existing ones, and may engage in discussions with Exodus management regarding operations, governance, and strategic alternatives.

Management Comments

• The purpose of the Trust is to liquidate its assets, including the reported shares, and make distributions to former creditors and other stakeholders of the Debtors as contemplated under the Plan.
• The Reporting Person intends to monitor and evaluate its investment on an ongoing basis and expects regularly to review and consider alternative ways of managing such investment.
• Subject to market conditions, valuations, regulatory approvals and any other applicable approvals, the Reporting Person may acquire additional securities of the Issuer or dispose of any securities of the Issuer in open market transactions, privately negotiated transactions, or otherwise.

Industry Context

This filing is a direct consequence of the FTX bankruptcy proceedings, a significant event in the cryptocurrency industry. The transfer of assets to a recovery trust for liquidation reflects the ongoing efforts to resolve the financial fallout from the collapse of major crypto entities. For Exodus Movement, a company operating in the digital wallet and crypto space, having a large block of shares held by a liquidating entity is a unique situation stemming from the broader industry's past challenges.

Comparison to Industry Standards

• The acquisition of a significant stake (21.6%) in a publicly traded company by a bankruptcy recovery trust is not a standard investment practice but rather a unique outcome of a major corporate insolvency, such as the FTX bankruptcy.
• Unlike typical institutional investors who might hold for long-term strategic value or exert influence for operational improvements, the FTX Recovery Trust's mandate is liquidation, which contrasts with common industry benchmarks for large block holders.
• Comparable situations might include other large asset dispositions from major bankruptcy estates, such as those seen in the aftermath of Lehman Brothers or Enron, where distressed assets were managed for creditor recovery rather than strategic growth.

Stakeholder Impact

• Exodus Movement Shareholders: Potential for future dilution or downward pressure on share price due to the FTX Recovery Trust's liquidation mandate for its 21.6% stake.
• Former Creditors and Stakeholders of FTX Debtors: This transfer represents a step towards asset recovery and eventual distribution of proceeds from the FTX bankruptcy estate.

Next Steps

• The FTX Recovery Trust will continue to monitor and evaluate its investment in Exodus Movement, Inc.
• The Trust intends to review and consider alternative ways of managing its investment, including potential acquisition or disposition of securities.
• The Trust may engage in discussions with Exodus Movement, Inc. representatives and other stakeholders regarding the Issuer's operations, management, corporate governance, capital structure, and strategic alternatives.
• The Trust's ultimate goal is to liquidate its assets, including these shares, to make distributions to former creditors and stakeholders of the FTX Debtors.

Key Dates

Recommendation

While the presence of a large block of shares under a liquidation mandate introduces potential selling pressure and uncertainty for Exodus Movement, the immediate impact is a disclosure of an expected event from the FTX bankruptcy. Investors should hold to observe the Trust's actions and Exodus's response, as the timing and method of liquidation are not yet clear. The company's underlying business fundamentals should be re-evaluated once the Trust's disposition strategy becomes clearer.

Keywords

Exodus Movement, FTX Recovery Trust, Schedule 13D, FTX Bankruptcy, Crypto Assets, Digital Wallets, Share Ownership, Asset Liquidation, Corporate Governance, Investment Management