The FTX bankruptcy estate aims to sell its $175 million general unsecured claim against Genesis, the defunct cryptocurrency lender. FTX plans to divest these claims through public auctions or private transactions to repay debts and restructure financial obligations.
This move aligns with FTX‘s decision to liquidate assets rather than revive the collapsed cryptocurrency exchange, part of ongoing efforts to compensate customers affected by its 2022 collapse.
Creditors of FTX have until February 15 to raise objections to the proposed claims sale.
FTX and Genesis, initially entangled in reciprocal claims, have settled, resulting in a $175 million claim against the lender. Both parties have waived any other claims against each other as part of the settlement.
Genesis Global Capital, the cryptocurrency lending division of Genesis, had previously provided loans exceeding $2.8 billion to Alameda. Genesis filed for Chapter 11 bankruptcy protection in January following the FTX failure, leading to significant customer withdrawals.
Genesis and cryptocurrency exchange Gemini faced SEC accusations of violating U.S. securities laws with their cryptocurrency lending program.
Genesis recently settled a $21 million lawsuit with the SEC related to the defunct Gemini Earn investment product, bringing potential benefits to the debtors’ estates by resolving the SEC’s civil action claim and mitigating risks and expenses associated with prolonged litigation.
The FTX filing signifies a transformative step for the company, aiming to facilitate debt repayment and initiate financial restructuring. It reflects satisfaction with the Genesis settlement and proactive efforts to strengthen the company’s financial position.
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