Bankrupt crypto exchange FTX has reached a $175 million settlement with collapsed crypto lender Genesis, following a nearly $4 billion claim made on behalf of FTX’s failed sister company, trading firm Alameda Research
Documents filed Wednesday show that Genesis agreed to pay FTX the amount after the borrowers in May accused the crypto lending firm is “one of the main feeder funds for FTX and instrumental in his fraudulent business model.”
In the documents, current FTX CEO John J. Ray III described the settlement as “fair and equitable,” and that the agreed amount was “within the range of reasonableness.” The settlement must still be approved by the judges in each bankruptcy case.
FTX originally tried to recover approximately $3.9 billion from Genesis. Genesis owned by Digital Currency Group stops customer withdrawals in November after the collapse of FTX. This is one of the many crypto companies that went bust after a tumultuous 2022.
Alameda Research is a crypto trading company founded by FTX co-founder and former CEO Sam Bankman-Fried. It collapsed when digital asset behemoth FTX dissolved, taking all of its affiliated companies.
The big crypto brand unexpectedly went bankrupt in November, and later the 31-year-old Bankman-Fried arrested in the Bahamas. Prosecutors allege that he mismanaged the exchange and committed fraud in “one of the most sudden and difficult collapsed in the history of corporate America,” in the words of James Bromley, counsel to the new management of FTX.
Disgraced crypto mogul Bankman-Fried—also known as SBF—is imprisoned last week after a judge found probable cause to believe he tampered with witnesses.
He faces a number of criminal charges—including supposedly used stole customer money to make “contributions to Democrats and Republicans to try to influence cryptocurrency regulation.”
Bankman-Fried’s trial is expected to begin in October.