A New York bankruptcy judge approves settlement between FTX and Genesis Global Trading
A settlement agreement between bankrupt cryptocurrency firms FTX and Genesis Global Trading (GGC) has been approved by a New York bankruptcy judge. The agreement allows FTX-affiliated Alameda Research to receive $175 million from GGC. The United States Bankruptcy Court for the Southern District of New York gave the green light to the settlement agreement between FTX and GGC’s parent company Genesis Global Holdings in a filing submitted on Oct. 11. After approval, Genesis debtors are officially authorized to enter into and perform under the settlement agreement and pay $175 million to FTX.
Claims by FTX debtors against Genesis expunged
New York bankruptcy Judge Sean Lane has also expunged multiple claims by the FTX debtors against Genesis as part of the approved settlement. The court accepted the withdrawal of claims, including three claims by FTX Trading, six claims by Alameda Research, and six claims by West Realm Shires Services, representing FTX US.
Significant reduction in claimed amount
The approved settlement represents a significant reduction from the original amount claimed by FTX debtors. In May 2023, FTX debtors asserted claims totaling around $3.9 billion. These claims included loan repayments allegedly made by Alameda to GGC and assets allegedly withdrawn by Genesis debtors from FTX.
Genesis’ response to the settlement
Genesis had previously stated that the settlement was “fair and equitable” and would allow the company to avoid lengthy litigation with uncertain outcomes. However, some FTX creditors expressed discontent with the settlement and urged the Official Committee of Unsecured Creditors of FTX to contest it.
FTX’s collapse and Genesis’ exposure
The collapse of FTX in November 2022 had a significant impact on the cryptocurrency industry. Genesis, a crypto lending firm, was among the companies affected due to its exposure to FTX. It lost access to $175 million worth of crypto assets held in an FTX trading account. Genesis filed for bankruptcy in January 2023 after halting withdrawals.
Settlement amid ongoing trial of FTX founder
The settlement between Genesis and FTX comes at a time when FTX founder Sam Bankman Fried is facing multiple charges, including fraud, money laundering, and bribing officials.
Hot Take: Bankruptcy judge approves $175 million settlement between FTX and Genesis Global Trading
A New York bankruptcy judge has given the green light to a settlement agreement between bankrupt cryptocurrency firms FTX and Genesis Global Trading (GGC). This approval allows Alameda Research, affiliated with FTX, to receive $175 million from GGC. The settlement marks a significant reduction from the original amount claimed by FTX debtors, who initially asserted claims totaling around $3.9 billion. While Genesis views the settlement as fair and equitable, some FTX creditors have expressed discontent. The approval of this settlement comes amidst the ongoing trial of FTX founder Sam Bankman Fried, who faces multiple charges related to fraud and money laundering.
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