FTX Asks The Court To Sell Its $175M Claim Against Genesis By DCG

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On February 1, FTX filed a request in a Delaware court to sell its claim against Genesis Global Capital, an insolvent digital financial services company, for $175 million. Alameda Research, a hedge fund connected to the defunct Bitcoin exchange, made the assertion. If accepted, FTX is free to sell the claim in its entirety or in part, at different periods, to capitalize on the optimal circumstances. At now, claims against Genesis are being sold for 65% of their actual value, which is a substantial amount more than the 38% that Alameda Research claims are obtaining.

FTX Drops Allegations Against Genesis Post Negotiation

To “reduce the expense and time involved in submitting a different motion for every prospective sale,” the motion requests the adoption of a sales process that will be applied to all transactions. Within three days of the selling date, the sale price must equal, at minimum, 95% of “the highest price for GGC’s general unsecured claims that was offered by one or more of the top market makers on the reference date.” “It is in the greatest interests of the Creditors and their estates, creditors, holders of interest, and all other interested persons to enter into this order,” the proposed sale order said. By February 15th, objections to the claim’s sale may be filed.

In May 2023, they attempted to reclaim $3.9 billion from Genesis, as allowed by bankruptcy legislation. In August 2023, FTX and Genesis negotiated the $175 million claim, which the court authorized in October. FTX’s other allegations against Genesis were then dropped. Arguments that the settlement avoided protracted and expensive litigation, the result of which would likewise be unclear, and the unpredictable nature of the prospective recoveries were used by the parties to justify the drastically reduced amount.