The legal battle between the bankrupt crypto exchange FTX and cryptocurrency lender Genesis seems to be reaching a solution, according to a recent court submit reveals. According to the letter filed yesterday in the U.S. Bankruptcy Court for the Southern District of New York, both firms — which happened to have filed for bankruptcy — have agreed to settle their pending billion-dollar dispute.
How the feud started
ftx filed a motion in May this year to recover its money from Genesis and “non-debitor affiliates” so that the company could repay its creditors. The movement went so far as to describe Genesis (which attributed its solvency problems to the collapse of FTX) as “one of the most important feeder funds and instrumental to its [FTX and Sister company Alameda Research] fraudulent business model.”
FTX further alleged that Genesis received “avoidable transfers” from FTX’s debtors totaling nearly $3.9 billion. In response, Genesis denied due to FTX and archived a motion asking the bankruptcy judge to set its debt to FTX at zero. However, a subsequent letter from FTX to the bankruptcy judge revealed that the company had reduced its claim from $3.9 billion to $2 billion.
FTT token trades at $1.3 amid exchange's woes | Source: FTTUSD on Tradingview.com
FTX’s claim could have delayed a creditor’s payout and delayed Genesis’ bankruptcy proceedings. With the settlement in sight, things are likely to move quickly as according to the FTX letter, the associated debtors and debtors in the Chapter 11 bankruptcy case have reached a tentative settlement.
The court file reads:
The parties have reached an agreement in principle, subject to documentation, to a settlement that would, among other things, resolve the claims of the FTX debtors against the debtors in these Chapter 11 cases and the claims of the Genesis debtors against the FTX debtors in the FTX Chapter 11 Cases.
Genesis still not clear
Despite reaching a settlement with FTX, crypto lending platform Genesis still has other lawsuits to deal with, including one filed by Gemini against its parent company, Digital Currency Group (DCG), and its CEO, Barry Silbert. Gemini’s co-founder Cameron Winklevoss called up Barry Silbert Twitter in an open letter, alleging that Silbert and DCG engaged in “fraudulent conduct”.
He warned that Silbert’s failure to respond and Friday to the negotiating table would lead to a lawsuit. In a sequel tweetWinklevoss also submitted a “best and last offer” with a payment plan.
Still, Silbert and DCG did not respond, and true to his words, Winklevoss and Gemini filed a lawsuit against DCG and Silbert on July 7 for fraud.
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