Bankrupt crypto exchange FTX is aiming to recover a substantial amount of funds from Genesis, a crypto lender that has also gone bankrupt, and a still-functioning business based in the British Virgin Islands with the goal to recover value for FTX’s creditors.
According to a court filing, FTX’s lawyers have requested $1.8 billion in loans and a $273 million collateral pledge that was allegedly given to Genesis by Alameda Research, FTX’s sister trading company.
Additionally, FTX is looking to retrieve $1.6 billion in withdrawals supposedly made by Genesis, as well as $213 million withdrawn by GGC International, the BVI-based entity, from FTX before it declared bankruptcy.
The filing contends that Genesis was “largely repaid” the nearly $8 billion it loaned to Alameda, unlike other FTX creditors and customers. Genesis has been accused by FTX of serving as “one of the main feeder funds for FTX and instrumental to its fraudulent business model.”
Under bankruptcy laws that allow companies to recover “avoidable transfers” made in the 90 days prior to filing for bankruptcy, FTX’s attorneys are requesting this clawback.
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