Genesis Settles for $175 Million Payment with FTX

FTX and Genesis have reached an agreement - one where Genesis will pay Alameda Research a sum of $175 million.

This payment is intended to facilitate the approval of Genesis' chapter 11 reorganisation plan.

The deal also aims to mitigate the uncertainties and expenses linked to prolonged legal disputes involving FTX, Genesis, and GGCI, as conveyed by Genesis' legal representatives in a court filing.

Additionally, the settlement includes a noteworthy move by Genesis: the renouncement of all other claims against FTX, as outlined in the same filing.

FTX initiated the claim in May, with an initial value of nearly $4 billion. In response, Genesis countered with its own claims against FTX, including customer claims amounting to $176 million, according to the court filing.

Genesis found itself in financial turmoil due to the collapse of FTX last year, leading to its bankruptcy filing. Genesis Global Trading disclosed that its derivatives business held $175 million in the insolvent exchange.

The relationship between FTX and Genesis was intertwined, with both entities extending loans to each other.

Derar Islim, interim CEO of Genesis, acknowledged the beneficial terms of the settlement agreement.

He stated that the agreement yields immediate advantages for Genesis and its creditors, offering a preferable alternative to the uncertainty and costs tied to extensive litigation of the FTX and Genesis claims.

The agreement notably resolves FTX's claims against Genesis at a fraction of their stated value, as confirmed by Islim.

Furthermore, the agreement obviates the necessity for Genesis debtors to engage in legal battles over their claims within the FTX bankruptcy proceedings.

While the Genesis Debtors express confidence in the value of their claims, Islim acknowledged the intricate complexities surrounding these claims, making the outcome of litigation uncertain.

It is underlined that the Genesis Claims remain unsecured, and any potential recovery could be distant and uncertain.