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FTX Reaches Court Against Bankrupt Firm Genesis

Key Takeaways
  • Cryptocurrency exchange FTX has filed a proposal in court against the bankrupt firm Genesis Global Capital.
  • In the proposal, FTX is demanding to sell its claim against Genesis for $175 million.
  • The claim against the bankrupt digital financial services firm Genesis is currently being sold at 65% of its face value.
03-Feb-2024 By: Gunjan Sahu
FTX Reaches Court Ag

FTX Strategy for Claim Selling and Potential Impact on Genesis

Cryptocurrency exchange FTX, which has shut down against the bankrupt digital financial services firm Genesis Global Capital, has filed a petition in the Delaware District Court. In this petition, FTX has demanded that it wants to sell its claim against Genesis for $175 million. It is worth mentioning that the claim against the bankrupt firm Genesis Global Capital was made by the hedge fund Alameda Research associated with FTX. FTX cryptocurrency exchange is facing hurdles in relaunching of FTX 2.0.

According to information, the current claim against Genesis is being sold at 65% of its face value, which is significantly higher than the 38% claim made by Alameda Research. It is noteworthy that if this proposal is approved in court, FTX, taking advantage of the best conditions, can sell the claim entirely or partially at different times. According to Coin Gabbar, by selling its claim against Genesis Global Capital, FTX is currently working towards fulfilling its recently made plan to compensate its customers.

FTX Plans to Pay Customers and Creditors

Recently, the legal team of cryptocurrency exchange FTX, in their statement given during the FTX Lawsuit hearing in the Delaware District Court, stated that the firm is currently working on a plan to fully compensate its customers and creditors for their funds. The firm may release its disclosure statement in the coming time regarding this matter. FTX's legal team also mentioned here that the disclosure statement will be issued based on the results so far and current estimates, providing information on how fund settlements with customers will be carried out.

Legal Team Denied on FTX Relaunch

Regarding the bankrupt cryptocurrency exchange FTX, the legal team of the firm clarified in their statement given in the Delaware District Court that the firm is currently not working on any plan related to the relaunch of FTX. In their statement during the FTX Lawsuit hearing, the legal team stated that during the tenure of former CEO and founder Sam Bankman-Fried (SBF), the firm encountered several financial irregularities, which is a major cause for concern. The current situation is such that due to SBF's failures, any investor is not showing interest in associating with the cryptocurrency exchange FTX and investing their capital. Consequently, the launching of FTX 2.0 is currently not feasible.

FTX Co-founder and Official will be Punished 

In the first trial of the fraud case associated with the bankrupt cryptocurrency exchange FTX, co-founder Sam Bankman-Fried (SBF) has been found guilty on all 7 charges. Along with him, Gary Wang, Caroline Ellison, and Nishad Singh have also been declared guilty by the court. The court has also set a date for sentencing all the defendants. It is noteworthy that on March 28, the sentence for all the accused, including SBF, will be announced.

Also Read: BlackRock, ProShares Bitcoin ETFs Surpass GBTC Daily Trade

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