In a May 3 filing, FTX said it intends to commence adversarial proceedings against GGC “to recover funds received by Genesis and non-debtor affiliates so that these funds can be shared with all other creditors of FTX debtors.” in FTX Chapter 11 cases”.
Officials claim FTX-affiliate Alameda Research had largely repaid the $8 billion borrowed from Genesis Trading, just weeks before the former filed for Chapter 11 bankruptcy protection.
Bankruptcy officials at FTX and Alameda Research will go to great lengths to recover funds lost by the previous administration led by Sam Bankman-Fried. The crypto exchange under John J. Ray III, CEO and head of restructuring, has sued various entities, including asking politicians on both islands to refund cash donated by SBF.
Additionally, Ray indicated that the exchange may never recover all of the lost funds, but he remains focused on getting as much as possible.
FTX at Genesis Global
According to court documents on Wednesday, current officials at FTX and Alameda Research are seeking to recover nearly $4 billion paid to DCG-backed Genesis Trading. Officials claim that FTX affiliate Alameda Research had largely repaid the $8 billion borrowed from Genesis Trading, just weeks before the former filed for Chapter 11 bankruptcy protection. funds received by Genesis and non-debtor affiliates so that these funds may be shared with all other creditors of FTX debtors in FTX Chapter 11 cases.
These creditors include several million customers who were owed more than $11 billion at the time of the filing of the FTX Chapter 11 Cases,” the filing reads. Alameda Research reportedly repaid $1.8 billion in loans to Genesis Trading and pledged $273 million over the next three months.
Furthermore, the filings noted that Genesis Trading withdrew another $1.6 billion from FTX, while Genesis Global Capital International withdrew another $213 million in that same period. As a result, a motion hearing was set for May 25 to discuss the matter in depth.
A Close Reflection
Current FTX officials have reportedly recovered around $5 billion in liquid assets, including Solana, Bitcoin, and ETH. At some point, current FTX officials are looking to reopen the exchange to accumulate more resources for debtors.
On May 3, FTX 2.0 shareholder tweeted the following:
“FTX moves to claw back $3.9 billion from Genesis:
1. $2.1 billion loan repayments/collateral pledge
2. $1.8 billion FTX exchange withdrawals.”
In a recent update from FTX debtors, Ray noted that the former officials significantly misled investors as they continued to squander their assets. “We are continuing our efforts to review the events that influenced FTX’s downfall and identify and recover the greatest possible value for creditors,” Ray said.
Current FTX officials recently said they entered into an agreement with M7 Holdings, LLC, a subsidiary of Miami International Holdings, Inc., for the sale of LedgerX LLC, FTX’s futures and options exchange and clearinghouse unit.
FTX debtors were reportedly able to recover approximately $50 million from the LedgerX LLC transaction. Meanwhile, FTX’s international entities, including the Japan subsidiary, have made great progress in paying investors.
By Audy Castaneda
