- The agreement is a far cry from the initial claim of $4B
- FTX's CEO confirmed the agreement was fair
- FTX owes Genesis $226M
FTX’s hedge fund arm Alameda Research is entitled to a claim of $175 million from the estate of Genesis, which has also filed for bankruptcy, CoinDesk wrote, citing a legal agreement submitted in court filings on August 16. Genesis and CoinDesk are both owned by Digital Currency Group.
Far cry from original claim
The agreement is a significant departure from the amount of $4 billion, which FTX originally asked for. However, it waives Genesis’ parallel claims toward FTX.
Attorneys hope the agreement will help the two insolvent firms settle their affairs and return customers their funds. Genesis Global Capital filed for insolvency in January.
According to a filing by Genesis attorneys, the settlement will have a series of benefits, including making the road to confirming the Genesis Debtors’ chapter 11 plan of reorganization smoother.
FTX CEO John J. Ray III confirmed the agreement was fair in a parallel court filing. He stated it represented his company’s best interests considering the magnitude of legal uncertainty surrounding the claim.
Crypto winter rages on
The now-proverbial crypto winter has witnessed a myriad of crypto companies declare bankruptcy. They were often financially intertwined in complicated ways, which lawyers are now trying to unravel against the backdrop of proceedings.
Originally, FTX’s claims toward Genesis totaled $3.88 billion. This amount includes loans that Alameda Research has repaid as well as funds Genesis withdrew from the FTX exchange before the latter filed for bankruptcy in November.
Genesis is FTX’s biggest creditor
Genesis Global Capital is also the bankrupt exchange’s biggest unsecured creditor. Court filings show that FTX owes them $226 million.
In July, attorneys announced they’d struck a deal in principle, but no details were provided. The deal has now been presented for approval to the judges administering each entity. It will be reviewed in court in September.
In related news, FTX’s attorneys requested a bankruptcy court in Delaware award recovery of more than $323 million from FTX Europe.
