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Beleaguered crypto exchange FTX and CEO John J. Ray III agree to settle with Genesis entities for $176 million. FTX creditors are disappointed with the plan and asking the Official Committee of Unsecured Creditors of FTX (UCC) to object to the settlement agreement as Alameda paid billions of FTX customer funds to Genesis in 2022.
FTX Motion For Settlement Agreement With Genesis
According to a court filing, FTX Trading and affiliated debtors submitted a motion for a court order to settle the dispute with Genesis entities for almost $176 million in claims.
Genesis entities have asserted claims against FTX and affiliates, which is approximately $176 million customer claim against FTX Trading.
“$140 million avoidance claim against Alameda, an approximately $40 million outstanding loan claim against Alameda, and, to the extent of any allowed FTX Claim, claims under section 502(h) of the Bankruptcy Code.”
FTX argues recoveries from the Genesis debtors and other Genesis entities are uncertain and settlement is the best possible way to prevent further disputes.
In addition, FTX CEO John Ray III also filed a declaration in support of the motion for a settlement agreement with Genesis and granting related relief.
FTX Creditors Oppose the Settlement
FTX 2.0 Coalition on August 17 said this is the worst deal by FTX, especially amid the DOJ investigation on DCG and Genesis.
“Genesis claims are currently worth more than FTX’s even as Genesis lender balances are inflated by the interest they earned from lending, among others, to Alameda.”
It expects the UCC to object to this settlement agreement as “Genesis was repaid by Alameda with billions of FTX customer funds in 2022.” These coins belong to FTX customers.
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