Defunct crypto firms FTX and Genesis have finally resolved their disputes, reaching an agreement in principle as per a letter sent by their legal representatives to Judge Sean H. Lane on July 27. While the settlement terms have not been made public, the claims were brought by FTX in its bankruptcy case.
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 Chapter 11 Cases.
Each firm is attempting to recover money that belongs to its own debtors. According to a court document from January, Genesis, the largest unsecured creditor of FTX and its associated entities, owes $226.3 million. However, FTX asserted that the amount is close to $4 billion after decreasing from $2 billion, a claim refuted by Genesis.
Lending platform and Digital Currency Group [DCG] subsidiary Genesis filed Chapter 11 bankruptcy in the federal court of Manhattan last year, becoming the latest to crumble in the FTX contagion and a heavy blow to the empire of DCG boss Barry Silbert.
The crypto broker named over 100,000 creditors in the “mega” bankruptcy case, with total obligations ranging from $1.2 billion to $11 billion, as per the then-bankruptcy documents.
Meanwhile, the accusation against the former founder of the crypto exchange FTX, Sam Bankman-Fried, was narrowed for the second time by federal prosecutors as they withdrew a campaign financing charge against the former CEO.
FTX Won’t Pursue Campaign Finance Charge
Investigators informed Judge Lewis Kaplan on July 27 that they were dropping the allegation of conspiracy to make unlawful campaign contributions because the Bahamas government did not give their consent for that charge to be brought against Bankman-Fried when he was extradited from the island nation in December.
Previously, the Manhattan office of the U.S. Attorney dismissed an accusation against him for breaking anti-bribery laws on identical grounds. The actions most likely lessen Bankman-Fried’s criminal exposure. Prosecutors alleged that he and others colluded to swindle investors and clients out of billions.
Recently, a $1 billion lawsuit was brought against the indicted crypto entrepreneur and his three former associates.