- The FTX bankruptcy estate is seeking to claw back $3.9 billion from bankrupt crypto lender Genesis Global Capital.
- The estate will reportedly use the funds to repay its creditors and millions of stranded customers.
The FTX bankruptcy estate wants nearly $4 billion back from Genesis Global Capital, the bankrupt crypto lending unit of the Digital Currency Group.
This marks the latest attempt by the defunct crypto exchange to claw back a series of investments and loans made to businesses around the globe. Last month the estate clawed back $460 million from Bahamas-based Modulo Capital.
FTX says Genesis received avoidable transfers
According to a filing in the U.S. Bankruptcy Court for the Southern District of New York, FTX’s new management is seeking $3.9 billion from bankrupt digital asset lender Genesis Global Capital, in order to repay its creditors and stranded customers.
The clawback amount pertains to various loan repayments and collaterals pledged by the crypto exchange to the bankrupt DCG subsidiary.
In the 90-day period prior to FTX’s bankruptcy filing last year, its sister firm Alameda Research repaid loans worth approximately $1.8 billion to Genesis Global.
The quantitative trading firm also pledged collateral in the aggregate amount of approximately $273 million to Genesis during the same period.
The bankruptcy estate argued in the filing that these payments to Genesis were “avoidable transfers.” The avoidable transfer also includes $1.6 billion worth of crypto assets that Genesis withdrew from FTX.com in the days leading up to its Chapter 11 bankruptcy filing.
Furthermore, an associated entity of Genesis, GGC International, also withdrew approximately $213 million worth of assets from the crypto exchange during the same period.
According to the FTX bankruptcy estate,
“ They seek to claw back funds received by Genesis and non-debtor affiliates so that these funds can be shared with all other creditors of the FTX Debtors in the FTX Chapter 11 Cases.”
These creditors include millions of customers that were owed more than $11 billion at the time of the exchange’s bankruptcy filing in November last year.
