Bankrupt Crypto Entities Genesis and FTX Reach Agreement on $175 Million Claim
FTX’s sister trading firm, Alameda Research, will be allowed a general unsecured claim of $175 million against Genesis. The disgraced crypto exchange led by Sam Bankman-Fried previously sought to claw back $4 billion from DCG-owned lender Genesis which also filed for Chapter 11 bankruptcy.
However, the latest court filing suggests that FTX and Genesis have reached an agreement, with the former having to settle for $3.825 billion less than originally demanded. The deal also entails waiving Genesis’ corresponding claims against FTX.
- Genesis lawyers highlighted that the settlement will greatly streamline the process of confirming the Chapter 11 reorganization plan without incurring the expenses associated with prolonged litigation.
“The agreement will, among various outcomes, notably facilitate the approval process for the Genesis Debtors’ chapter 11 reorganization plan (referred to as the “Genesis Plan”). Additionally, it will eliminate the potential drawbacks, costs, and unpredictability linked to extended legal disputes involving the FTX Debtors, Genesis Debtors, and GGCI.”
- In a corresponding submission to the court, FTX’s chief restructuring officer, John J. Ray III, maintained that the deal is “fair” and in the “best interest” of all the parties engaged.
- The intention behind this arrangement, as stated by legal representatives, is to facilitate the orderly resolution of matters for both companies and the reimbursement of funds to customers.
- Meanwhile, the FTX 2.0 Coalition expressed its dissatisfaction, arguing that the agreement is notably unfavorable, especially given the ongoing Department of Justice (DOJ) investigation into DCG and Genesis.
- The group anticipates that the Unsecured Creditors’ Committee (UCC) will raise objections to this settlement, citing that Genesis had been reimbursed by Alameda using substantial amounts from FTX customer funds in 2022.
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