A New York bankruptcy judge approved a settlement between bankrupt cryptocurrency firm FTX and Genesis Global Trading (GGC), allowing FTX-affiliated Alameda Research to receive $175 million from GGC.
The U.S. Bankruptcy Court for the Southern District of New York approved the settlement agreement between FTX and GGC parent Genesis Global Holdco in a filing submitted October 11th.
Upon approval, the Genesis debtors were duly authorized to enter into and perform the settlement agreement and pay $175 million to FTX.
In approving the settlement amount, New York Bankruptcy Judge Sean Lane also deleted multiple claims against Genesis by FTX debtors.
Documents show the court has accepted the withdrawal of a number of claims, including three claims by FTX Trading, six claims by Alameda Research and six claims by West Realm Shires Services on behalf of FTX US.
The approved settlement marks a significant reduction in the amount originally claimed by FTX debtors, who collectively assertive Claims in May 2023 total approximately $3.9 billion. FTX’s claims include approximately $1.8 billion in loan repayments allegedly made by Alameda to GGC, $1.6 billion in assets allegedly withdrawn by Genesis debtors from FTX and other assets.
It was previously reported that Genesis explain The settlement is “fair and equitable” and will allow the company to avoid “protracted litigation” whose outcome is “inherently uncertain.” On the other hand, FTX creditors expressed dissatisfaction with the settlement and urged the FTX Official Committee of Unsecured Creditors to challenge the agreement in August 2023.
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The FTX exchange collapsed in November 2022, triggering massive contagion in the cryptocurrency industry. Cryptocurrency lending company Genesis was one of many companies affected by FTX’s failure due to its exposure to FTX, with its derivatives commodities business unable to access $175 million worth of crypto assets locked in FTX trading accounts. Genesis stopped withdrawals in November 2022 and filed for bankruptcy in January 2023.
Genesis’ settlement with FTX comes as FTX founder Sam Bankman Fried is on trial facing 13 charges of fraud, money laundering and bribing officials.
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