In a significant development, the defunct cryptocurrency giant FTX has filed a motion in a Delaware court, seeking approval to sell its $175 million claim against Genesis Global Capital, a financially troubled digital services firm. This move is part of FTX’s plan to compensate customers affected by its 2022 collapse.
Read more about it here.
FTX’s motion, filed in the Delaware bankruptcy court, aims to get permission to sell the $175 million claim, initially made by Alameda Research, a hedge fund linked to the now-collapsed cryptocurrency exchange. Acquired through a settlement last year, FTX intends to either auction or privately transact these claims, a crucial step in its overall strategy to liquidate assets and address financial challenges.
FTX emphasizes its commitment to liquidating assets instead of attempting to revive the collapsed cryptocurrency exchange. The motion argues that selling the claim is in the best interests of all stakeholders, including debtors, creditors, and interest holders. However, any concerned parties have until February 15th to voice objections to this significant move.
The motion also seeks approval for a standardized sales procedure, aiming to streamline the process for increased efficiency and faster resolution of financial matters.
Tracing it Back to the Start
Initially seeking a substantial $3.9 billion recovery from Genesis in May, FTX negotiated a settlement of $175 million in August, later court-approved in October. This pragmatic approach concluded FTX’s claims against Genesis, avoiding prolonged and costly litigation.
Genesis Global Capital, a subsidiary of Digital Currency Group (DCG), filed for bankruptcy in January 2023, sparking legal conflicts, particularly with the Gemini cryptocurrency exchange. Genesis managed a program for Gemini, but it had to stop when Genesis faced money issues.
Recently, on February 1st, Genesis agreed to pay $21 million to the U.S. Securities and Exchange Commission (SEC) because of problems with the Gemini program. This settlement is poised to play a significant role in Genesis Global Capital’s ongoing bankruptcy reorganization process.
FTX’s move to sell the claim is a big change for the company. They hope it helps pay off debts and make financial changes. This shows the company’s satisfaction with the Genesis settlement and highlights proactive efforts to strengthen its financial position in the crypto world.
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