FTX Seeks to Recover $3.9B in Fiat and Crypto from Genesis: Report
According to a report from Wednesday, May 4th, FTX is attempting to recover around $3.9 billion from Geneses. The funds are allegedly both in cryptocurrency and fiat. Additionally, the exchange is seeking to recover them both from Genesis Global Capital and the non-bankrupt GGC International.
FTX Is Trying to Get $3.9 Billion Back From Genesis Global and GGC
FTX is reportedly attempting to recover $3.9 billion from Genesis Global Capital and GGC International. The funds are allegedly both in cryptocurrency and cash and relate to loans and collateral collectively worth just over $2 billion given by Alameda to Genesis Global shortly before the former filed for bankruptcy.
They also relate to $213 million withdrawn by GCI International and $1.6 billion withdrawn by Genesis Global Capital. This isn’t the first time FTX is targeting a subsidiary of the Digital Currency Group for assets alleged to belong to Alameda Research. Earlier this year, the company sued Grayscale for more than $9 billion.
Additionally, Genesis Global Capital, the company’s lending arm, itself filed for bankruptcy in January. The filing was, in large part, caused by the contagion stemming from the collapse of FTX, and came after a month-long public feud between the DCG and the Winklevoss twins which saw the latter’s Gemini shut down its earn program.
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FTX’s “Herculean” Effort to Recover Funds
FTX’s current CEO, John J. Ray III, signaled that recovering the bankrupt company’s assets will be an arduous process. Over the course of several months, he highlighted the lack of corporate controls within the firm, as well as the former management’s poor record-keeping practices as key reasons for the difficulty.
In early December 2022, the firm even hired forensic investigators to try and locate the missing funds and by the beginning of the current year, the efforts appeared to have started giving results. An update published in January stated that the company has managed to recover billions of assets but described the task as “Herculean” and stated the work is far from over.
Since the start of the year, Ray’s team has also provided several additional reports highlighting the dire state FTX was in under the SBF-run management. A recent report even disclosed some internal communications in which Bankman-Fried admitted that his firm would regularly misplace millions of dollars and simply described the events saying “such is life.”
Editorial note (May 4th, 2023, 05:40 PM EST): The headline and the first paragraph were altered for clarity.
Do you think FTX will manage to recover the $3.9 billion from Genesis? Let us know in the comments below.