Alameda Research, affiliated with FTX, will receive 5 million from GGC as the United States Bankruptcy Court for the Southern District of New York endorsed the settlement agreement between the exchange and Genesis Global Holdco. The news comes amid Sam Bankman-Fried’s trial, which has revealed the inner workings at both FTX and Alameda, including financial malpractices and misuse of customers’ funds. Notably, he faces 13 charges, including fraud, money laundering, and bribing officials. Genesis to Pay 5M to FTX Genesis debtors have now been officially authorized to enter into the settlement agreement and pay 5 million to FTX. Additionally, New York bankruptcy Judge Sean Lane has dismissed multiple claims by FTX debtors against Genesis. The court has accepted the
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Alameda Research, affiliated with FTX, will receive $175 million from GGC as the United States Bankruptcy Court for the Southern District of New York endorsed the settlement agreement between the exchange and Genesis Global Holdco.
The news comes amid Sam Bankman-Fried’s trial, which has revealed the inner workings at both FTX and Alameda, including financial malpractices and misuse of customers’ funds. Notably, he faces 13 charges, including fraud, money laundering, and bribing officials.
Genesis to Pay $175M to FTX
Genesis debtors have now been officially authorized to enter into the settlement agreement and pay $175 million to FTX. Additionally, New York bankruptcy Judge Sean Lane has dismissed multiple claims by FTX debtors against Genesis. The court has accepted the withdrawal of numerous claims, including three by FTX Trading, six by Alameda Research, and six by West Realm Shires Services, representing FTX US.
The approved settlement represents a significant reduction from the originally claimed amount of around $3.9 billion by FTX debtors in May 2023. These claims included approximately $1.8 billion in alleged loan repayments from Alameda to GGC and $1.6 billion of assets allegedly withdrawn by Genesis debtors from FTX, among other assets.
Genesis had previously stated that the settlement was considered “fair and equitable” and would allow the company to avoid engaging in “protracted litigation,” the outcome of which would be “inherently uncertain.” The Official Committee of Unsecured Creditors of FTX was advised to challenge the settlement in August 2023 after several FTX creditors voiced their displeasure with the deal.
FTX’s Collapse Began a Ripple Effect
The collapse of the FTX exchange in November 2022 had widespread repercussions across the cryptocurrency industry. Genesis, a crypto lending firm, was among the companies severely impacted by the failure of FTX, as its derivatives business lost access to approximately $175 million worth of crypto assets held in an FTX trading account. Following the suspension of withdrawals in November 2022, Genesis filed for bankruptcy in January 2023.
Meanwhile, the FTX debtors published their first report detailing the management team’s mistakes before going bankrupt on April 9, 2023. According to the report, the FTX Group lacks proper organizational structure, management, and governance. The findings included security flaws, such as leaving private keys to move cryptocurrency assets in often unencrypted files and hot wallets with unprotected internet access.