FTX Challenges Genesis’ Zero Debt Claim

FTX alleges Genesis owes $3.9 billion in cash and crypto, as major feeder fund enabling fraudulent business model


mundissima/Shutterstock, modified by Blockworks


Bankrupt crypto exchange FTX has strongly refuted claims that Genesis owes it no money.

FTX claims that it is a major creditor of Genesis but was not invited to a mediation session arranged by the court in May. Genesis allegedly handpicked the participants in the mediation.

In a court filing published Friday, FTX indicated it was surprised at Genesis’ unexpected move to declare FTX’s unresolved claims worthless. Genesis justified this action as necessary to quickly move forward with the confirmation of a Chapter 11 plan.

Earlier in May, FTX said it is owed $3.9 billion in cash and cryptocurrency from Genesis. “Genesis was one of the main feeder funds for FTX and instrumental to its fraudulent business model,” attorneys for FTX wrote.

But Genesis argued that pursuing FTX’s claims through the regular legal process would cause unnecessary delays in managing its administrative process. Genesis added that it aims to finalize a plan by August, before its requested extended exclusive period ends.

FTX has joined a group of other Genesis creditors who have submitted objections to extending the mediation process. These objections further complicate settlement discussions between Genesis, parent company Digital Currency Group and its other creditors.

This development follows DCG’s recent failure to fulfill a $630 million payment owed to Genesis.

Genesis wants to extend the discussions until June 16, and there will be a hearing on Monday to decide on this extension. 

Genesis, which used to give clients interest for lending their digital coins, stopped allowing withdrawals in November, partly due to its connection to FTX’s bankruptcy. It then filed for bankruptcy in January and has been trying to reach a settlement with its creditors. Long delays are making some individual creditors oppose more mediation attempts.

“The mediation is a waste of estate resources without the inclusion of the FTX Debtors and should not continue without the FTX Debtors’ involvement,” FTX says.

Don’t miss the next big story – join our free daily newsletter.


Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

MON - WED, MARCH 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience:  Attend expert-led panel discussions and fireside chats  Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts   Grow your network […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Frax report cover.jpg


Frax saw continued development in its frxETH liquid staking derivative and Fraxlend money market throughout 2023. Frax V3 introduces an RWA strategy to drive utility to the protocol's cornerstone product, the FRAX stablecoin.


MicroStrategy discloses the purchase of 16,000 bitcoin throughout November


Digital asset firms face potential new regulatory landscape under Treasury’s proposed authority expansion


Uniswap Labs will be providing trading APIs to Talos investors through Fireblocks


DYDX supply will climb by up to 80% after the Friday unlock, but a couple factors make a massive sell-off appear unlikely


Switzerland-based Pando Asset, which has crypto products trading on the SIX Swiss Exchange, now looks to the US


Binance does not hold the required licenses to advertise and serve customers in the Philippines, the country’s securities regulator said