FTX and Genesis, two bankrupt cryptocurrency companies, have struck a preliminary understanding that would resolve all of the claims made by both sides in their ongoing dispute.
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,” according to a letter submitted by their attorneys to Judge Sean H. Lane. Information concerning the settlement was not included in the letter.
According to a January court document that lists a list of significant creditors, Genesis had become the largest unsecured creditor of FTX and its connected firms, owing $226.3 million. Parallel to this, FTX asserted that Genesis owed approximately $4 billion in debt, which was ultimately reduced to $2 billion and refuted by Genesis.
Following the collapse of FTX in November, Genesis Global Capital, the lending arm of Genesis, temporarily stopped redemptions and new loans. According to a representative at the time, this move was made in response to the severe market disruption and decline in industry trust brought on by the FTX implosion. The company then sought bankruptcy protection in January, having already suffered losses of several hundred million dollars as a result of the failure of Three Arrows Capital. The owner of Genesis is the Digital Currency Group (DCG)
,