FTX Debtors and Genesis in Hard Dispute Over Debt Claim

FTX Genesis Debt

A month after claiming it was owed $4 billion by defunct cryptocurrency lender Genesis, insolvent cryptocurrency exchange FTX is now disputing that allegation.

The FTX debtors, according to a court filing made on June 2 in a New York Bankruptcy Court, have objected to Genesis’ estimate that they are entitled to claims totaling ‘$0.00’, as Genesis said in an estimation processes petition filed on June 1.

The FTX debtors claimed they were excluded from the mediation process and not provided “any advance notice” before the motion was filed.

$0 Claim Assessment

As stated in the petition, the Genesis debtors consider the $0 claim assessment to be “critical” so that they may quickly go ahead with the “confirmation of a Chapter 11 plan.” Even a claim made by Genesis that the FTX debtors were brought up-to-date on the proceedings was disputed by the FTX debtors.

It was asserted that the FTX creditors “are by far the largest unsecured creditors in the Genesis Debtors’ Chapter 11 cases” and so their presence at the mediation was essential. On May 3, FTX’s attorneys filed a claim against Genesis for almost $4 billion in order to recover “avoidable transfers” made during the 90 days prior to the company’s bankruptcy filing.

In order to resume legal action against Genesis, which is routinely put on hold when a company declares bankruptcy, the FTX debtors have filed a move for release from the stay. The court has been asked to consider the application on June 15.

The parent business of Genesis Capital, a cryptocurrency investment firm, Digital Currency Group (DCG), said on May 9 that it was unable to resolve its “outstanding intercompany obligations” in a way that would allow it to refund its creditors.

Haris Rauf