FTX is seeking to sell $175 million in bonds to Genesis as part of its efforts to repay creditors.
Posted: February 2, 2024 10:24 AM Updated: February 2, 2024 10:24 AM
Correction and fact check date: February 2, 2024, 10:24 AM
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FTX filed court papers with the intention of selling $175 million of its claims against Genesis to facilitate repayment of debt to creditors.
The FTX Bankruptcy Foundation has filed court documents seeking to sell $175 million in general unsecured notes against defunct cryptocurrency lender Genesis. FTX proposed to sell these claims, either in whole or in installments, to a single or multiple purchasers through public auction or private transactions.
Proceeds from this sale will be utilized to accelerate debt repayment and begin restructuring of our financial obligations to our creditors.
The filing is consistent with FTX’s recent announcement that it will not revive the cryptocurrency exchange and instead liquidate its assets. The decision is part of ongoing efforts to compensate customers affected by the 2022 collapse.
FTX creditors are given until February 15 to register objections to the proposed claims sale.
Initially involved in significant cross-claims, Genesis and FTX ultimately settled with the collapsed exchange, filing $175 million in claims against its lenders. Under the settlement agreement, the two companies also waived other claims against each other.
Genesis’ cryptocurrency lending arm, Genesis Global Capital, previously provided over $2.8 billion in loans to Alameda. Last January, Genesis filed for Chapter 11 bankruptcy protection following the FTX failure, which led to a significant withdrawal of customers from the platform.
Genesis Navigates SEC’s Claims
Genesis and cryptocurrency exchange Gemini have been indicted by the U.S. Securities and Exchange Commission (SEC) on charges of violating U.S. securities laws with their cryptocurrency lending program. The company remains entangled in a legal dispute launched by the New York attorney general that implicates DCG and Gemini and includes allegations of fraud.
Genesis recently reached a $21 million settlement with the SEC over its now-defunct Gemini Earn investment product. The proposed settlement is expected to bring several benefits to the Debtors’ estates, primarily by resolving civil litigation claims brought by the SEC in Chapter 11 cases.
This resolution aims to eliminate the risks, costs, and uncertainties associated with protracted litigation before the SEC. The filing details that the $21 million settlement will be distributed once Genesis has satisfied all other permitted administrative fees, collateral, priority and general unsecured claims.
The latest FTX filing kick-starts the company’s transformation process, allowing it to expedite debt repayment and begin restructuring its financial obligations to creditors. This action indicates satisfaction with the agreement with Genesis and proactive measures to strengthen our financial position.
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Alisa is a reporter for Metaverse Post. She focuses on everything related to investing, AI, metaverse, and Web3. Alisa holds a degree in Art Business and her expertise lies in the fields of art and technology. She developed a passion for journalism through her work with VCs, notable cryptocurrency projects, and science writing. You can contact us at (email protected).
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alice davidson
Alisa is a reporter for Metaverse Post. She focuses on everything related to investing, AI, metaverse, and Web3. Alisa holds a degree in Art Business and her expertise lies in the fields of art and technology. She developed a passion for journalism through her work with VCs, notable cryptocurrency projects, and science writing. You can contact us at (email protected).
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