Crypto

Bankruptcy judge approves deal between FTX and Genesis Global

Bankruptcy judge approves deal between FTX and Genesis Global

The deal will see FTX-linked Alameda Research receive $175 million from Genesis

A settlement has been approved by a New York bankruptcy judge between bankrupt cryptocurrency firms FTX and Genesis Global Trading (GGC) that grants FTX-affiliated Alameda Research $175 million from GGC.

The US Bankruptcy Court of the Southern District of New York approved the settlement deal between FTX and Genesis Global Holdings, GGC’s parent company, in the October 11 filing.

Genesis debtors are authorized to enter into and execute the settlement agreement after approval and pay $175 million to FTX. In concurrence with authorizing the settlement payment, New York bankruptcy Judge Sean Lane also erased multiple claims by FTX debtors against Genesis.

Based on the filing, the court has accepted withdrawing a considerable number of claims, including six by Alameda Research, three from FTX Trading and another six claims by the firm that represents FTX US, West Realm Shires Services.

The settlement is significantly less than the original amount claimed by FTX debtors, who declared claims of about $3.9 billion in May 2023. FTX’s claims included approximately $1.8 billion in loan reimbursements supposedly made by Alameda to GGC and $1.6 billion allegedly withdrawn by Genesis debtors from FTX, as well as other assets.

Reports say Genesis believes the settlement was “fair and equitable” and allows the company to avoid seeking “protracted litigation,” where the result would be “inherently uncertain.” However, FTX creditors expressed dissatisfaction with the settlement and insisted that the Official Committee of Unsecured Creditors of FTX challenge the August 2023 agreement.

The Genesis settlement with FTX coincides with the ongoing trial of FTX founder Sam Bankman Fried, who’s facing 13 charges, including fraud, money laundering and attempting to bribe officials.

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