Defunct crypto firms FTX and Genesis reached an in-principle agreement to settle the disputes in their ongoing Chapter 11 bankruptcy proceedings. The settlement indication came more than two months after bankrupt crypto exchange FTX filed documents in New York’s bankruptcy court in a bid to extract nearly $4 billion from Genesis Global Capital.
Lawyers representing the bankrupt crypto firms recently wrote to Judge Sean Lane of the U.S. Bankruptcy Court for the Southern District of New York to inform him of the in-principle agreement. The letter did not provide details about the terms of the settlement but stated that both parties sought to resolve the claims made by each other and withdraw any pending motions against each other.
The letter to bankruptcy Judge Sean Lane read:
The Parties have reached an agreement in principle, subject to documentation, regarding a settlement that would resolve, among other things, the claims asserted by the FTX Debtors against the Debtors in these Chapter 11 Cases and the claims asserted by the Genesis Debtors against the FTX Debtors in the FTX Chapter 11 Cases.
The settlement deal reached by FTX and Genesis would be subject to approval from the relevant bankruptcy court. Both parties reportedly planned to file motions for approval of the deal. News of the deal was likely welcomed by customers of FTX and Genesis, who filed for Chapter 11 bankruptcy in November 2022 and January 2023 respectively.
Earlier this year, Genesis Global Capital emerged as FTX’s largest unsecured creditor. The Bahamas-based crypto exchange owed more than $226 million to the bankrupt crypto lender. In May, FTX staked a claim of $3.9 billion from Genesis to clawback nearly half of the $8 billion worth of loans that FTX’s sister firm Alameda Research paid back to Genesis. The claim amount was later reduced to $2 billion, which was disputed by Genesis.
