Bankrupt crypto giants FTX and Genesis reach agreement to resolve billion-dollar claims News ▸ US ▸ FTX ▸ Bankruptcy
Bankrupt crypto giants FTX and Genesis reach agreement to resolve billion-dollar claims
The two bankrupt firms note that the agreement was still subject to a court approval.
2 min read
Updated: Jul. 28, 2023 at 11:43 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Bankrupt crypto companies FTX and Genesis Global announced they had reached an
agreement in principle concerning claims made by the firms against themselves, per a July 27 letter to Judge Sean Lane.
Although the letter does not disclose the specifics of the settlement terms, it mentions that the firms are aiming to resolve the claims asserted by FTX Debtors and Genesis Global Debtors against each other in their respective Chapter 11 bankruptcy cases.
FTX moved to recover $3.9 billion from the bankrupt crypto lender Genesis in May. However, the lender rejected this claim, estimating the crypto exchange debtors’ claims at $0.00. FTX objected to Genesis’s bankruptcy proceedings and recovery plans following the estimate.
On the other hand, a January court filing revealed that Genesis was the largest unsecured creditor of the bankrupt exchange. FTX owes Genesis around $226.3 million.
According to the letter, the parties are keen to document the settlement and file a “motion pursuant to Federal Rule of Bankruptcy Procedure 9019(a) for entry of an order approving the Settlement in their respective courts.”
Meanwhile, the two companies noted that while the agreement could be adopted as a settlement, it was still subject to documentation and court approval.
The parties also requested an extension of deadlines for submitting motions or briefs to the court.
FTX filed for bankruptcy last year following a surge in customer withdrawals. The former CEO, Sam Bankman-Fried, acknowledged the company’s inability to meet these demands due to asset shortages. Court reports indicate an approximate $9 billion discrepancy in the exchange’s books.
Following FTX’s implosion, Genesis suspended all redemptions prior to their bankruptcy filing in January.
Since then, the lender has been entangled in a legal tussle with Gemini, which filed a lawsuit against Digital Currency Group, the parent company of Genesis. Gemini accused DCG of knowing that the lender had been bankrupt since 2022 but failed to inform investors.
Gemini and Genesis maintained a significant business partnership involving the Gemini Earn program.
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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FTX
FTX is a defunct cryptocurrency exchange, currently in bankruptcy proceedings, that was founded by Sam Bankman-Fried and Zixiao “Gary” Wang in May 2019.
Genesis
Genesis is an institutional digital asset markets and a full-service digital currency prime brokerage providing a single point of access for select qualified individuals and global institutional investors.
Gemini
Gemini is a regulated digital asset exchange and custodian that allows customers to buy, sell, store, and stake digital assets in a regulated, secure, and compliant manner.
Digital Currency Group
Digital Currency Group’s mission is to accelerate the development of a better financial system.