FTX allows the sale of the claim in whole or in part to take advantage of favorable market conditions.
At present, claims against Genesis are selling at 65% of their face value,
Cryptocurrency exchange FTX is seeking court approval to sell its $175 million claim against the bankrupt firm Genesis Global Capital. In a recent motion filed in a Delaware court, FTX aims to simplify the process, allowing the sale of the claim in whole or in part to take advantage of favorable market conditions.
Currently, claims against Genesis are selling at 65% of their face value, a significant increase from the 38% fetching for Alameda Research claims. The proposed sale order looks to streamline the procedure, reducing costs and avoiding delays associated with individual motions for each sale.
Originally seeking to recover $3.9 billion from Genesis in May 2023, FTX negotiated and court-approved a reduced claim of $175 million in August. The decision to settle for a smaller sum was motivated by the unpredictability of potential recoveries and the desire to avoid prolonged and costly litigation.
FTX faced a collapse in November 2022 due to irregularities in its account books. Genesis, a subsidiary of the Digital Currency Group, had $175 million tied up in its FTX account but asserted that it did not impact its market-making activities.
Genesis filed for bankruptcy in January 2023, leading to a conflict with the Gemini cryptocurrency exchange. The court hearing on Feb. 14 will consider Genesis debtors’ proposed bankruptcy reorganization plan and the inclusion of the SEC settlement, where Genesis agreed to pay $21 million to settle a 2023 federal lawsuit alleging the sale of unregistered securities.
In a recent court hearing, FTX outlined a plan to repay affected parties, emphasizing that while the objective is attainable, it is not guaranteed.
Top 5 Metaverse Tokens to buy in April 2022 APE, STX, ENJ, SAND, WAXP Silvergate to Repay $9.85 Million to BlockFi in Reserve Account US Treasury Sanctions Blender.io for helping North Korea Launder $20.5 million in Stolen Axie Crypto Philippine SEC issues a warning about unlicensed crypto exchanges