- Bankrupt crypto exchange FTX and crypto lender Genesis reach an agreement in principle to resolve multi-billion dollar claims.
- The “settlement” aims to resolve various claims, however, specific details of the agreement are not disclosed yet.
- Both parties are eager for court approval to enable financial recovery.
Bankrupt crypto exchange FTX and crypto lender Genesis have announced an agreement in principle to resolve the multi-billion dollar claims that have plagued both firms during their bankruptcy cases. The legal counsels representing both companies jointly penned a letter to Judge Sean Lane on July 27, announcing the unexpected resolution.
[The “Settlement”] would resolve, among other things, the claims asserted by the FTX Debtors against the Debtors in these Chapter 11 Cases, and the claims asserted by the Genesis Debtors against the FTX Debtors in the FTX Chapter 11 Cases.
The “Settlement,” subject to documentation, aims to resolve various claims asserted by the parties involved in the jointly administered Chapter 11 proceedings currently pending in the United States Bankruptcy Court for the District of Delaware.
Furthermore, all pending motions related to the disputed claims are expected to be withdrawn as part of the deal. However, the initial announcement provided no specific details regarding the terms of the agreement.
Nonetheless, both parties are eager to finalize the terms and seek prompt court approval to set the stage for their financial recovery. To facilitate the negotiation process, they have requested the court to adjourn upcoming deadlines on current motions and due briefs.
In May 2023, FTX filed a motion to retrieve money received by Genesis and non-debtor affiliates. It claimed that Genesis owed the crypto exchange up to almost $3.9 billion, an amount that was later reduced to $2 billion. Tensions escalated further when FTX debtors objected to Genesis’ estimation, claiming that they were entitled to zero claims.
Moreover, following the bankruptcy of FTX, Genesis was revealed to be the largest unsecured creditor of the exchange and its affiliates, with an outstanding debt of $226 million, according to court filings.
Meanwhile, another crypto exchange, Gemini, accused Genesis’ parent company, Digital Currency Group, and its founder of making “false, misleading, and incomplete representations and omissions to Gemini.”
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