Genesis Global Trading (GGC) and FTX have reached a settlement, resulting in Genesis agreeing to pay a substantial $175 million to FTX. The agreement comes after FTX, along with affiliate Alameda Research, filed a lawsuit seeking significant compensation from Genesis. Furthermore, there are reports suggesting that Genesis has temporarily suspended customer withdrawals from its lending division.
Court Approves Genesis’s $175 Million FTX Settlement
The settlement between Genesis and FTX, amounting to $175 million, has been approved by the United States Bankruptcy Court for the Southern District of New York. This decision allows GGC debtors to proceed with the payment, signifying a significant development in the ongoing legal dispute. Genesis considers the court-approved settlement to be fair and just, aiming to avoid protracted court battles with uncertain outcomes. However, FTX’s creditors have expressed their dissatisfaction and have urged the Official Committee of Unsecured Creditors of FTX to challenge the agreement.
Genesis is grappling with the consequences of FTX’s collapse
Genesis is facing repercussions following the downfall of FTX in November 2022, which had a significant impact on the crypto industry. Due to its financial connections with FTX, Genesis encountered difficulties, with its derivatives division losing access to $175 million worth of crypto assets.
In addition, Genesis suspended customer withdrawals in November 2022 and subsequently filed for bankruptcy in January 2023. This legal dispute with FTX coincides with the ongoing trial of FTX founder Sam Bankman Fried, who is facing serious allegations such as fraud, money laundering, and bribery of officials.
During the court proceedings, Caroline Ellison, the former CEO of Alameda Research, made a crucial revelation. Under Bankman-Fried’s guidance, she prepared seven different balance sheets to conceal substantial loans on Alameda Research’s records, particularly the staggering $9.9 billion owed to FTX clients.