Genesis and FTX reach an agreement over a dispute over R$ 1 billion By CriptoFácil

2023-07-28 19:10:10

© Reuters Genesis and FTX reach settlement over BRL 1 billion dispute

CriptoFácil – The companies FTX and Genesis, both in judicial recovery, reached an agreement in a dispute that exceeds R$ 1 billion. According to Judge Sean H. Lane, the parties agreed to end their dispute without recourse to the case’s judgment.

“The parties have reached an agreement in principle, subject to documentation, that would settle, among other things, the claims made by the FTX Debtors against the Debtors in these Chapter 11 Cases and the claims made by the Genesis Debtors against the FTX Debtors in the cases against FTX”, says a letter submitted by the companies to the judge.

However, the letter did not include details about the agreement or the amounts each company has to pay.

Understand the FTX and Genesis case

Genesis emerged as FTX’s largest unsecured creditor, i.e., a creditor that has no guarantees of receiving the amounts the exchange owes it. which corresponds to approximately R$ 1.2 billion in current values.

This sum includes debts from FTX and its affiliated companies. When FTX collapsed, Genesis soon followed, having to stop customer withdrawals. According to the lending firm, the collapse of FTX wiped out its liquidity, making payments impossible. In November, Genesis needed a $1 billion loan to honor its commitments.

At the same time, FTX also alleged that Genesis owed it nearly $4 billion, an amount later reduced to $2 billion. On the other hand, Genesis has denied this debt.

Genesis Global Capital, the lending division of Genesis, temporarily halted redemptions and new lending following the FTX collapse in November. This decision was made in response to the extreme market dislocation and loss of industry confidence caused by the FTX implosion, a spokesman said at the time.

The company then filed for bankruptcy protection in January 2023, already weakened by losses in the order of several hundred million due to the collapse of the Three Arrows Capital fund. Both FTX and Genesis seek to recover funds to pay their debts and compensate customers who have taken losses.

By CriptoFacil