FTX seeks to claw back $4B from Genesis in a battle of the bankrupt

Cryptocurrency speech FTX is seeking to retrieve astir $4 cardinal from likewise bankrupt crypto lender Genesis and a still-solvent British Virgin Islands-based entity — portion of efforts to retrieve worth for creditors.

In a May 3 tribunal filing successful a New York Bankruptcy Court, lawyers for FTX sought $1.8 cardinal successful loans and a $273 cardinal collateral pledge allegedly fixed to Genesis from FTX’s sister trading steadfast Alameda Research.

FTX is besides seeking to claw backmost $1.6 cardinal successful withdrawals allegedly made by Genesis and a further $213 cardinal purported to beryllium withdrawn by its BV-based entity GGC International from the speech earlier it collapsed into Chapter 11 bankruptcy connected Nov. 11, 2022.

The filing claims Genesis was “largely repaid” its astir $8 cardinal successful loans made to Alameda, “unlike different FTX creditors and customers.”

FTX alleged the bankrupt lender was “one of the main feeder funds for FTX and instrumental to its fraudulent concern model.”

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The exchange’s lawyers are seeking the clawback nether bankruptcy laws that let it to recoup “avoidable transfers” that hap successful a 90-day play earlier a institution declares bankruptcy.

Previous clawbacks by FTX person focused connected $3.2 cardinal successful payments made to its erstwhile executives, a $460 cardinal investment made by Alameda into task superior steadfast Modulo Capital and astir $93 cardinal successful governmental donations made by laminitis Sam Bankman-Fried and different erstwhile apical brass.

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