FTX Trying to Recover $4 Billion From Genesis
Reading Time: 2 minutesFTX is trying to recover some $4 billion in loan repayments made to Genesis prior to its collapse
Alameda Research, which had borrowed up to $8 billion since 2018, repaid almost $2 billion prior to FTX’s demise
The former exchange is using ‘Avoidance Actions’ to try and claw back the repayments
Zombie exchange FTX yesterday filed a court motion to recover almost $4 billion in funds from Genesis Global Capital related to dealings the pair had together. The two companies had been doing business since 2018, with FTX’s trading wing Alameda Research borrowing between $6.5 and $8 billion in total. FTX paid some of the money back, but its lawyers are now trying to reclaim some of these repayments using bankruptcy laws. Both companies are going through bankruptcy proceedings, and Genesis will naturally not take too kindly to the prospect of having to hand over $4 billion in loan repayments it was legally entitled to.
Alameda Research Repaid Almost $2 Billion
According to Wednesday’s filing, Alameda Research repaid $1.8 billion in loans to Genesis and pledged $273 million more in the three months days FTX and its affiliates, filed for bankruptcy in early November. These loans were often only 50% secured, leaving Genesis in a highly vulnerable position, having had faith that everything at FTX was above board.
Genesis also withdrew another $1.6 billion from FTX, accompanied by Genesis Global Capital International taking another $213 million out in that same period.
Voyager Also Targeted
FTX lawyers will seek to use ‘Avoidance Actions’ to claw back funds received by Genesis and non-debtor affiliates, funds they would use to repay FTX’s creditors, who are currently owed over $11 billion. Avoidance Actions are proceedings that seek to unwind transactions that occurred shortly before a bankruptcy filing.
Alameda is using the same strategy against another bankrupt lending platform, Voyager, from which it is trying to reclaim $445 million in loan repayments.
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Filed under: Bitcoin - @ May 4, 2023 9:24 am