11 mins ago | 2 mins read
Exchange News- Genesis had a role in enabling the FTX Group’s reckless actions as per FTX’s attorneys.
- Genesis Global Capital lent more than $8 billion to FTX Debtor Alameda Research in 2021.
According to court records filed on May 3rd. FTX under John Ray III is trying to recover cash from insolvent platform Genesis by way of repaid loans, withdrawn liquidity, and collateral. There is more than $3.88 billion at stake for all Genesis-related organizations combined.
FTX’s attorneys stated in court filings submitted on May 3. That Genesis had a role in enabling the FTX Group’s reckless actions. The insolvent exchange’s legal team also tries to justify its request by saying that, in contrast to the other FTX creditors, Genesis was substantially reimbursed.
Similar Strategy Used Against Voyager
Genesis was a major source of funding for FTX, helping to sustain the company’s fraudulent operations. Moreover, Genesis Global Capital (GGC) lent more than $8 billion to FTX Debtor Alameda Research Ltd. in 2021. Genesis was reimbursed far more than other FTX creditors and consumers.
This seems counterproductive, given that the goal of a bankruptcy proceeding is to restore the financial stability of the creditors. However, $1.88 billion of the attempted clawback represents loans repaid to Genesis by the FTX Group, the same “strategy” used by the FTX Group in a lawsuit it filed against another defunct cryptocurrency platform, Voyager.
Alameda’s promise of collateral to Genesis in the amount of $273 million was presumably put to the use that collateral is intended for. The most flagrant aspect of the clawback effort is the demand for the return of money that Genesis has already withdrawn. Over $1.8 billion in Genesis liquidity was withdrawn from FTX platforms, as stated in the request from the FTX Group.
Genesis alone had $1.6 billion in assets at the time of this claim. And GGC International, a Genesis subsidiary and non-debtor in this case, owned an additional $213 million.
Recommended For You:
FBI Raids House of Former Co-CEO of FTX’s Bahamas Subsidiary
Source: https://thenewscrypto.com/ftx-goes-all-out-to-recover-3-88-billion-from-insolvent-genesis/