Genesis Global Trading (GGC) has reached an agreement with FTX, resulting in Genesis paying a hefty $175 million to FTX. This settlement comes after FTX and its affiliate Alameda Research filed a lawsuit demanding substantial compensation from Genesis. There are also rumors circulating that Genesis has temporarily suspended customer withdrawals within its lending branch.
Court Approves Genesis’s $175M FTX Settlement
The United States Bankruptcy Court for the Southern District of New York has given its approval to the settlement on October 11. This decision allows GGC debtors to pay the agreed-upon amount to FTX, marking a significant milestone in their ongoing legal dispute.
Genesis sees this court-endorsed settlement as fair and equitable, as they hope to avoid lengthy court battles with uncertain outcomes. However, FTX’s creditors have expressed their dissatisfaction and have urged the Official Committee of Unsecured Creditors of FTX to contest the agreement.
Genesis Faces Fallout from FTX’s Downfall
The troubles for GGC began when FTX experienced a downfall in November 2022, causing shockwaves throughout the crypto industry. Due to its financial ties with FTX, Genesis faced challenges, including losing access to $175 million worth of crypto assets held by its derivatives unit.
In addition, Genesis halted withdrawals in November 2022 and eventually filed for bankruptcy in January 2023. This legal battle with FTX is happening concurrently with the trial of FTX founder Sam Bankman Fried, who faces serious allegations such as fraud, money laundering, and bribing officials.
In court, Caroline Ellison, the former CEO of Alameda Research, disclosed that under Bankman-Fried’s guidance, she prepared multiple balance sheets to hide massive loans on Alameda Research’s records, including a staggering $9.9 billion owed to FTX clients.
Hot Take: Genesis Settles with FTX for $175 Million
Genesis Global Trading has agreed to pay $175 million to FTX as part of a settlement approved by the United States Bankruptcy Court for the Southern District of New York. This settlement comes after a lawsuit filed by FTX and Alameda Research, demanding compensation from Genesis. Despite seeing the settlement as fair and equitable, Genesis faces discontent from FTX’s creditors who are urging further contestation. The fallout from FTX’s downfall in November 2022 has caused significant challenges for Genesis, including losing access to $175 million in crypto assets and ultimately filing for bankruptcy. The legal battle is happening alongside FTX founder Sam Bankman Fried’s trial, where serious allegations have been made against him.
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