FTX Seeks to Recoup About $4 Billion in an Ongoing Bankruptcy Case

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Last Updated on May 4, 2023 by Bitfinsider

In a court filing on Wednesday, insolvent cryptocurrency exchange FTX claimed that similarly insolvent Genesis Global Capital owes them roughly $4 billion in funds.

According to the motion, Genesis was “largely repaid” for the close to $8 billion in loans given to Alameda Research, a company connected to FTX, in the months before FTX filed for bankruptcy in November. Genesis is a division of CoinDesk’s parent firm, Digital Currency Group. Genesis itself declared bankruptcy in January.

In the 90 days prior to the different FTX entities declaring bankruptcy, Alameda repaid $1.8 billion in loans to Genesis and guaranteed $273 million to Genesis, according to Wednesday’s declaration. Genesis Global Capital International also withdrew $213 million during that time, while Genesis withdrew an additional $1.6 billion from FTX.

To ensure that the other creditors of the FTX Debtors in the FTX Chapter 11 Cases receive a fair portion of the funds obtained by Genesis and non-debtor affiliates, the Avoidance Actions will try to recover the money. As of the time of the filing of the FTX Chapter 11 Cases, these creditors included several million consumers owed over $11 billion, according to the filing. The proposal will be discussed at a hearing on May 25.

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