In the ever-evolving world of cryptocurrency, FTX’s Alameda Research has struck a significant deal, securing a claim worth a whopping $175 million from the estate of the now-bankrupt crypto company, Genesis. This recent development, submitted in court filings, marks a pivotal moment in the crypto industry’s ongoing saga.
This deal showcases a drastic reduction from FTX’s original claim, which was nearly $4 billion. The primary objective behind this agreement is to expedite the process of settling the companies’ affairs and ensuring the return of funds to their respective customers. This move is especially crucial, considering Genesis Global Capital’s bankruptcy declaration earlier in January.
Both Genesis and CoinDesk operate under the umbrella of the Digital Currency Group. The settlement, as outlined by Genesis’ legal team, is expected to significantly streamline the confirmation of the Genesis Debtors’ chapter 11 reorganization plan. This efficiency is achieved without the burdensome costs of extended litigation.
FTX’s CEO, John J. Ray III, in a separate court document, endorsed the deal. He believes that this agreement is in FTX’s best interests, particularly given the prevailing legal uncertainties surrounding the claims.
The backdrop to this deal is the crypto winter, which has seen multiple crypto companies collapse. Many of these companies had intricate financial ties, and lawyers are now tasked with unraveling these in simultaneous bankruptcy proceedings.
FTX’s initial claims against Genesis totaled a staggering $3.88 billion. This amount encompassed loan repayments by Alameda Research and assets that Genesis had withdrawn from the FTX exchange in the lead-up to its November bankruptcy. Conversely, Genesis Global Capital stands as FTX’s largest unsecured creditor, with court filings indicating a debt of $226 million.
In July, an initial agreement was announced, but the details remained under wraps. This deal has now been presented for judicial approval, with hearings slated for September 6 and 13.
