FTX Recovery Trust filed a lawsuit seeking $1.15 billion from Genesis Digital Assets, alleging Sam Bankman‑Fried directed Alameda to buy overvalued GDA shares and divert customer funds; the suit aims to reclaim commingled and misappropriated assets to reimburse FTX creditors.
FTX Recovery Trust alleges $1.15B misappropriation tied to Genesis Digital Assets.
The complaint claims SBF directed purchases of GDA shares via Alameda at inflated prices in 2021–2022.
$500M+ for preferred shares and $550.9M sent directly to two GDA co‑founders are cited in court filings.
FTX Recovery Trust lawsuit seeks $1.15B from Genesis Digital Assets over alleged misappropriation by Sam Bankman‑Fried — read the filing and recovery timeline.
What is the FTX Recovery Trust lawsuit against Genesis Digital Assets?
FTX Recovery Trust lawsuit accuses Genesis Digital Assets and two co‑founders of receiving more than $1.15 billion in commingled and misappropriated funds linked to Sam Bankman‑Fried’s direction of Alameda Research. The filing in the US Bankruptcy Court for the District of Delaware seeks to recover those transfers for the benefit of FTX customers and creditors.
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The complaint alleges that in 2021–2022, Bankman‑Fried caused Alameda to acquire GDA shares at “outrageously inflated prices,” and that additional transfers were sent directly to GDA co‑founders Rashit Makhat and Marco Krohn.
Source: Kroll
How much money is FTX seeking to recover and on what basis?
The complaint seeks approximately $1.15 billion, describing the transfers as proceeds of “fraud on customers and other creditors.” It cites two categories: over $500 million paid for 154 preferred shares and $550.9 million sent directly to two co‑founders. The Trust alleges those transactions benefited Bankman‑Fried personally while harming FTX creditors.
Why does the Trust claim the transactions were improper?
The filing states SBF used Alameda as a conduit to divert customer funds and to disguise transfers as investments. It notes alleged misrepresentations in financial records from Genesis Digital and contextual risks — including Kazakhstan’s energy challenges at the time — that the Trust says were ignored.
Frequently Asked Questions
What legal remedies is the FTX Recovery Trust pursuing?
The Trust is pursuing clawback claims in bankruptcy court to recover transfers as fraudulent or preferential, seeking disgorgement, rescission or monetary judgment to return funds to FTX creditors. Litigation and negotiated settlements are both possible outcomes.
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Reimbursements began in February after court approval. Initial distributions included a $1.2 billion payout, followed by a $5 billion distribution in May, and additional distributions scheduled to continue as recoveries are realized.
In 2023, Genesis Global Trading — a separate entity from Genesis Digital Assets — settled for $175 million with FTX. The current suit targets Genesis Digital Assets and individual co‑founders for separate alleged transfers totaling $1.15 billion.
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