FTX seeks $4 billion from bankrupt Genesis

FTX lawyers filed a lawsuit against the bankrupt crypto-lending platform Genesis, demanding the return of $4 billion.

FTX moves to claw back $3.9 billion from Genesis.

1. $2.1 billion loan repayments/collateral pledge
2. $1.8 billion FTX exchange withdrawals pic.twitter.com/1SsW8yoPck

— FTX 2.0 shareholder (in spe) (@AFTXcreditor) May 3, 2023

Documents show that 90 days before Alameda Research’s collapse, it extended Genesis a loan of $1.8 billion and provided collateral of $273 million.

FTX is also seeking to recover $1.6 billion and $213 million that Genesis and its subsidiary withdrew from the exchange shortly before its collapse.

On November 16, 2022, the crypto-lending platform Genesis Global Capital froze withdrawals and the issuing of new loans. The firm cited “heightened client withdrawal requests” after the collapse of FTX.

In January 2023, Genesis Global Holdco and its subsidiaries Genesis Asia Pacific and Genesis Global Capital filed for bankruptcy. According to media reports, their liabilities exceed $3 billion.

Parallel to the loan proceedings, a trio of media groups — The New York Times, The Financial Times and Bloomberg — обратилась in bankruptcy court seeking to disclose the names of 9 million FTX clients.

«There are no legal grounds to allow exchange users to participate anonymously in bankruptcy proceedings,» the statement said.

This is not the first time media have pressed such demands. Yet last time, FTX security expert Jeremy Sheridan warned that the platform’s clients could fall victim to fraud.

He recalled the situation with the collapsed custodial service Celsius, when after the publication of personal data, users began receiving suspicious calls and offers. In particular, the attackers impersonated the company’s lawyers and brokers.

In response, the media groups argued that FTX and Celsius customers are actually less susceptible to scammers, given their familiarity with most of the scams taking place in the crypto sector.

«Despite possible attempts, there is officially no evidence that any individuals named in the Celsius proceedings have fallen victim to extortionists — neither their personal data nor their digital assets were harmed,» the media group asserts.

In May, FTX’s consultants and lawyers billed $103 million for services in the first quarter.