FTX and Genesis reach an agreement for a $175 million payment to Alameda

263

After initiating negotiations at the end of July, the bankrupt crypto exchange FTX and the crypto lender Genesis reached an agreement on Thursday which provides for the latter to pay Alameda Research, the investment company of the empire, an amount of more than 175 million dollars.

Note that the agreement also states that Genesis waives any further claims against FTX, according to documents filed with the court.

A derisory compensation compared to litigation of 3.9 billion dollars

“The settlement will, among other things, significantly facilitate the confirmation of Genesis’ debtors’ Chapter 11 reorganization plan and eliminate the risks, expense, and uncertainty associated with protracted litigation among FTX’s debtors, the debtors of Genesis and GGCI,” the attorneys for Genesis said.

Note, however, that the amount involved in the agreement seems paltry compared to the claim of nearly $ 3.9 billion that FTX advanced earlier this year.

That doesn’t stop Genesis from calling the settlement ” just and fair, ” however, saying it would allow the company to engage in “protracted litigation” whose outcome would be “inherently uncertain.”

“The terms of the settlement agreement provide significant, short-term benefits to Genesis debtors and their creditors, as opposed to the uncertainty and expense of full litigation over FTX and Genesis’ claims,” said indeed said Derar Islim, interim CEO of Genesis, commenting on the deal.

For their part, former FTX users do not seem very satisfied. The FTX 2.0 Coalition Twitter account, which brings together aggrieved users, has indeed declared in the reaction that it is undoubtedly the “worst agreement to date”, considering that the amount of the agreement is insignificant.

FTX asks court to settle Genesis dispute for a $175 million Genesis claim, the release of a $175 million customer claim and (near worthless) Alameda claims.

Down from first $3.9 billion to $2 billion asserted, this must be the worst deal to date, especially in light of the new… pic.twitter.com/ipxHuWMU4A

— FTX 2.0 Coalition (@AFTXcreditor) August 17, 2023

The aftermath of a case that shook cryptos in 2022

Recall that the crypto platform FTX and the crypto lending specialist Genesis Global, were among the biggest victims of the turbulence and serial scandals in the crypto industry in 2022, some believing that their fall played a big role in the fall of the digital asset prices last year.

In more detail, it should be noted that Genesis filed for bankruptcy and began proceedings with the Bankruptcy Court after having seen its activities in the field of derivatives blocked in FTX to the tune of $175 million, knowing that the two companies granted loans to each other.

Finally, note that the FTX bankruptcy case is still before the US Court and that the bail of its former boss Sam Bankman-Fried, accused of “fraud of epic proportions”, has had his bail revoked. a few days ago, he tried to influence witnesses.