FTX, Genesis reach in-principle agreement to settle bankruptcy case

Bankrupt crypto exchange FTX and crypto lender Genesis have reached an agreement in principle to resolve the claims brought by FTX in its bankruptcy case.

On July 27, legal counsels for both firms sent a letter to bankruptcy Judge Sean Lane stating that they had agreed to a settlement.

However, the agreement was in principle and did not provide any details on the settlement.

Both firms are bankrupt and have been trying to collect money for creditors while under court supervision.

The settlement would resolve FTX’s claims against Genesis debtors and vice versa. It would also withdraw pending motions related to those claims. Both parties intend to document and seek court approval of the settlement promptly, it stated.

“The Parties have reached an agreement in principle, subject to documentation, regarding a settlement that would resolve, among other things, the claims asserted by the FTX Debtors against the Debtors in these Chapter 11 Cases and the claims asserted by the Genesis Debtors against the FTX Debtors in the FTX Chapter 11 Cases.”

To allow time to finalize terms, they requested the court adjourn upcoming deadlines on current motions and due briefs.

Snippet from the letter in Case No. 23-10063. Source: Kroll

FTX has previously claimed that Genesis, which is owned by Digital Currency Group, owed the bankrupt exchange as much as $4 billion. However, it reduced the amount to $2 billion, according to a letter sent to Judge Lane earlier this month.

Genesis filed for Chapter 11 bankruptcy protection in a New York bankruptcy court in January following the collapse of crypto hedge fund Three Arrows Capital.

The crypto lender is the largest unsecured creditor of FTX and its affiliates with $226 million owed, according to court filings.

In June, FTX debtors objected to Genesis’ estimation that it was entitled to claims totaling zero; however, these claims and objections appear to have been settled with this latest development.

Collect this article as an NFT to preserve this moment in history and show your support for independent journalism in the crypto space.

Magazine: Get your money back: The weird world of crypto litigation