FTX and Genesis reach a preliminary agreement on resolving bankruptcy cases

Author: MARTIN YOUNG, COINTELEGRAPH; Translation: Songxue, LianGuai

The bankrupt cryptocurrency exchange FTX and cryptocurrency lending institution Genesis have reached a preliminary agreement to resolve the claims raised by FTX in the bankruptcy case.

On July 27th, the legal advisors of both companies sent a letter to bankruptcy judge Sean Lane, stating that they have agreed to a settlement.

However, the agreement is a preliminary one and does not provide any details of the settlement.

Both companies have filed for bankruptcy and have been trying to raise funds for their creditors under court supervision.

The settlement will resolve FTX’s claims against Genesis and vice versa. It will also withdraw any pending motions related to these claims. The statement says that both parties intend to promptly document and seek court approval for the settlement.

“The parties have reached a preliminary agreement, as set forth in the papers, to resolve, among other things, the claims asserted by FTX creditors against the Debtors in these chapter 11 cases and the claims asserted by Genesis creditors against the FTX Debtors in the FTX chapter 11 case.”

To allow time to finalize the terms, they have requested the court to extend the deadlines for current motions and the expiration of the summary.

Excerpt from the letter in case number 23-10063. Source: Kroll

FTX previously claimed that Genesis, a subsidiary of the cryptocurrency group, owed the bankrupt exchange as much as $4 billion. However, according to a letter sent to Judge Lane earlier this month, the company has reduced the amount to $2 billion.

After the collapse of the cryptocurrency hedge fund Three Arrows Capital, Genesis applied for Chapter 11 bankruptcy protection under US bankruptcy law in New York in January of this year.

According to court documents, this cryptocurrency lender is the largest unsecured creditor of FTX and its affiliates, owing $226 million.

In June, FTX debtors opposed Genesis’ claim that their estimated total claim amount was zero, but it seems that these claims and objections have been resolved with this latest development.

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