Island Air Capital, a Bahamian charter carrier owned by aviation entrepreneur Paul Aranha, has agreed to surrender ownership of a Legacy 600 business jet, C6-BDE (msn 14500967), to the United States Department of Justice, receive USD1.98 million in compensation, and withdraw litigation it previously filed against bankrupt cryptocurrency firm FTX, which acquired two aircraft via the carrier in 2022.

Under the terms of the settlement, Island Air Capital agreed to fly the Embraer aircraft to Fort Lauderdale Executive, surrendering it to the custody of the government, which will pay the Bahamian carrier “reasonable costs for its maintenance of the two airplanes before they were seized by the government and for costs associated with transporting the Legacy to the United States,” ch-aviation learned through court documents.

Aranha began flying FTX founder Sam Bankman-Fried to and from the Bahamas in 2021 using Trans Island Airways (GGT, Nassau International) (TIA), a charter carrier he founded in 2012. As the volume of services between both parties increased, FTX agreed to finance the purchase of two aircraft “with an unsecured, no-interest loan." The deal was sealed between Aranha and Bankman-Fried in a handshake.

“FTX did not wish to own planes, and TIA’s business model supported the acquisition of additional aircraft, so FTX agreed with Mr. Aranha that he would purchase the planes,” the carrier explained in its docket filing.

Island Air Capital acquired a Global Express 5000, N410AT (msn 9295), on March 2, 2022, for USD15.9 million, and C6-BDE on August 4, 2022, for USD12.5 million. However, after Bankman-Fried was charged with seven counts, including conspiracy to commit fraud and money laundering, all property derived from proceeds traceable to the offences, including the two aircraft, were seizable by the US authorities, under the suspicion that FTX could have owned the planes but tried to hide said ownership.

US authorities seized N410AT in February 2023, but the Legacy 600 remained in the Bahamas while the litigation continued. Island Air Capital implored the bankruptcy court to recognise it as the owner of both aircraft and obtain permission to operate, manage, and sell them. Now that a deal has been reached, “I am pleased to have reached an agreement with the US government and the FTX estate to compensate me for the care of the planes after FTX’s collapse and to do so out of the proceeds from selling the planes,” Aranha told Bahamian newspaper The Tribune.

Island Air Capital is to be paid USD1.8 million to cover the maintenance costs plus USD183,000 to cover expenses in handing over the plane. It had 30 days to ferry the aircraft to the United States after the court entered the order on March 22.

ch-aviation reached out to Paul Aranha and Trans Island Airways for comment.