FTX And Genesis Come To In Principle Agreement

FTX And Genesis Come To In Principle Agreement

Disgraced crypto lender Genesis and crypto exchange FTX have come to an agreement for settling their ongoing dispute worth millions of dollars.

A letter was filed a day earlier about the said agreement in the Southern District of New York with the United States Bankruptcy Court. Both of the two companies have filed for Chapter 11 bankruptcy.

FTX’s motion

Last November, FTX had begun its bankruptcy proceedings and this year in May, the crypto exchange filed a motion.

It said that it wanted to get back the funds that had been given to Genesis and non-debtor affiliates for paying back its long list of creditors.

As a matter of fact, Genesis was referred to as a major feeder fund that had played a key role in the fraudulent business model of FTX as well as Alameda Research, its sister trading firm.

The ripple effects caused by the collapse of the FTX exchange eventually drove Genesis to file for bankruptcy in January.

The motion also stated that almost $3.9 billion worth of ‘avoidable transfers’ had been made to the crypto lender from debtors of the FTX exchange.

Genesis’ response

According to Genesis, it did not owe anything to the crypto exchange. In fact, a motion was filed by the crypto lender in June in which they made a request to Sean Lane, the US Bankruptcy judge.

Genesis requested the judge that its debt to FTX be declared zero. FTX also submitted a letter to Lane earlier this month in which the exchange had reduced its claim from $3.9 billion to $2 billion.

The latest letter informed the judge that both Genesis and FTX had come to an agreement about a settlement aimed at resolving the claims that FTX debtors had made against Genesis.

Apart from this, there were some other specific details that had also been mentioned in the same letter to the judge.

Genesis vs Gemini

Genesis has not just been involved in a spat with one crypto exchange. Gemini is another one with which the lender has had a rather public spat.

But, the difference is that this exchange is not bankrupt. Gemini had claimed in January that the lender owed $900 million to the users of its Earn program because they had been unable to withdraw their funds after the collapse of FTX.

Cameron Winklevoss, the co-founder of the Gemini crypto exchange, had taken to Twitter and directed them towards Barry Silbert, the CEO of DCG, the parent company of the lender.

On July 4th, Winklevoss tweeted an open letter in which he had warned Silbert that they would file a lawsuit if there would be no negotiation by the next Friday.

He had also made a final offer in a follow-up tweet, which included fresh loans and forbearance payments worth $1.465 billion denominated in Bitcoin, Ethereum, and USD.

Silbert had not responded to the tweets and Winklevoss had done exactly what he had promised i.e. he filed a lawsuit against the company.