Alameda Research, the trading wing of the defunct exchange, FTX, has settled a claim for $175 million with the bankrupt crypto firm, Genesis, according to recent court filings.
Based on legal filings unveiled on Aug. 17, Alameda Research will stake a claim of $175 million from Genesis’ assets.
The deal is a marked drop from the $4 billion FTX initially demanded. Notably, the settlement also dismisses any counterclaims Genesis held against FTX.
The maneuver is strategy to streamline the process of concluding the companies’ dealings and to expedite the return of funds to the customer base, particularly after Genesis Global Capital, a lender, declared bankruptcy in January of this year.
As court document shows, Genesis’ legal representatives said the settlement is intended to facilitate the “Genesis Debtors’ chapter 11 plan of reorganization” and eliminates potential expenses and time associated with protracted litigation.
John J. Ray III, FTX’s CEO, in a concurrent submission, concurred with the settlement’s terms. He asserted that, considering the ambiguities surrounding the legal claims, this settlement aligns with FTX’s best interests.
This backdrop is set against the “crypto winter,” where several crypto firms have folded.
These companies were often intricately financially interwoven, leading legal professionals on a quest to disentangle these relationships amidst simultaneous bankruptcy hearings.
Previously, FTX’s claims on Genesis stood at a staggering $3.88 billion, a sum comprising loan refunds processed by the hedge fund division, Alameda Research, and assets that Genesis had retracted from FTX’s platform leading up to its November insolvency declaration.
On the flip side, records reveal that Genesis Global Capital, in its capacity, stands as FTX’s principal unsecured creditor. The owed sum cited in court documents is $226 million.
While there had been whispers of an impending agreement back in July, specifics were under wraps.
The settlement awaits the green light from the judges overseeing both entities. Reviews are slated for Sep. 6 and 13.