FTX and Genesis Global Capital have reached an agreement to resolve a dispute between the debtors of the now-bankrupt cryptocurrency companies. The agreement was disclosed in a letter that was filed by their lawyers in the USbankruptcy court for the Southern District of New York yesterday (Thursday).
"The parties have reached an agreement in principle, subject to documentation, regarding a settlement that would resolve, among other things, the claims asserted by FTX's debtors against the debtors in these Chapter 11 cases and the claims asserted by Genesis' debtors against the FTX's debtors in the FTX's Chapter 11 cases," the letter noted.
FTX's and Genesis's Claims
Following the bankruptcy of FTX, Genesis emerged as the largest unsecured creditor of the cryptocurrency exchange, owed USD $226 million, according to court documents filed in January. Besides that, FTX claims that Genesis Global owes it USD $3.9 billion, an amount that was later reduced to USD $2 billion. Genesis, however, denied the claims.
FTX filed an application to recover the funds from Genesis Global in cash and cryptocurrencies in May. The amount includes USD $1.8 billion in loans and USD $1.6 billion that Genesis allegedly withdrew from FTX's trading platform before both companies went bankrupt. It includes USD $273 million in collateral given to Genesis Global and USD $213 million reportedly taken by the crypto lender's subsidiary.
Genesis Global suspended withdrawals last November, citing abnormal customer requests following the collapse of FTX. Additionally, the crypto lending platform, which suffered losses after the collapse of Three Arrows Capital, filed for bankruptcy in January.
Gemini Sues Genesis
Meanwhile, three weeks ago, Finance Magnates reported that Genesis' parent company and its Founder, Barry Silbert, had been sued by Gemini. The cryptocurrency exchange claims that the crypto lender and Silbert perpetrated fraud against investors in a digital asset lending program operated by both companies.
Gemini and Genesis partnered in a lending program that offered investors interest of up to 8%. However, following the insolvency of Genesis, the program suspended customers' withdrawals. Thus, Gemini is accusing Genesis and Silbert of being behind its investors' losses.
This article was written by Jared Kirui at www.financemagnates.com.
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