According to court papers filed on Wednesday, Alameda Research, which is part of FTX, has the right to claim $175 million from the bankruptcy estate of Genesis, a cryptocurrency company. This legal arrangement, as indicated in the documents, not only enables this claim to occur but also results in the dismissal of Genesis’s claims against FTX. This deal is a big drop from what FTX originally asked for, which was almost $4 billion.
This settlement is seen as a step toward putting things to rest for both companies and making it easier for their customers to get their money back. Genesis Global Capital, a lender, initiated this lawsuit after going bankrupt in January. Both Genesis and CoinDesk are important because they are both part of the Digital Currency Group.
According to papers that Genesis’ legal team sent to the court, the settlement will help with a number of things, including making it much easier for the court to approve the Genesis Debtors’ chapter 11 reorganization plan. The goal of this agreement is to escape the costs and hassles of long legal battles.
In a separate court filing, John J. Ray III, the CEO of FTX, said that the deal was fair. He said that it was in FTX’s best interest, especially since the claims were unclear from a legal standpoint.
Due to the problems caused by the downturn in the crypto industry, many coin companies have gone bankrupt. Many of these groups had complicated financial ties that made their situations hard to understand. Lawyers are now trying to figure out what happened through parallel bankruptcy procedures.
At first, FTX filed claims against Genesis that added up to $3.88 billion. This number included a lot of different things, like how the hedge fund branch Alameda Research paid back loans and how Genesis took assets off the FTX exchange before it went bankrupt in November.
On the flip side, court records reveal that Genesis Global Capital holds the position of FTX’s largest unsecured borrower, carrying a debt of $226 million.