FTX claims that Genesis and GGC International owes it $3.9 billion in cash and cryptocurrency for loans and withdrawals made prior to the exchange’s collapse.
The crypto exchange FTX, which filed for Chapter 11 bankruptcy in November 2021, is attempting to recover $3.9 billion in cash and cryptocurrency from Genesis Global Capital and its non-bankrupt affiliate GGC International.
FTX claims Genesis and GGC International owe it $3.9 billion for the following reasons, according to court filings filed on Wednesday:
- Before FTX’s bankruptcy, Genesis borrowed $1.8 billion in cash and cryptocurrency from Alameda Research, a crypto trading firm affiliated with FTX. As part of its bankruptcy procedure, Alameda Research transferred its loans to FTX.
- Genesis provided Alameda Research with $273 million in security for the debts that FTX also inherited.
- Genesis withdrew $1.6 billion in cash and crypto from FTX before FTX’s bankruptcy.
- Before FTX’s bankruptcy, GGC International withdrew $213 million in cash and cryptocurrencies.
FTX claims that Genesis and GGC International benefited unfairly from these transactions and wants to reverse or avoid them under bankruptcy law.
At the time of filing, FTX claimed it needed to collect the funds to pay off its customers and creditors, who are owed over $11 billion.
The court filings also show that Genesis repaid most of the loans it received from Alameda Research in 2022 before filing for bankruptcy.
However, FTX argues that these repayments were unnecessary transfers because they were made within 90 days of Genesis’s bankruptcy filing.
FTX requests a hearing to discuss its claim against Genesis and GGC International on May 25.
