A recent court filing in a New York bankruptcy court has revealed that the bankrupt crypto exchange FTX is trying to recover $3.9B in cash and crypto from the bankrupt crypto
lender Genesis and a non-bankrupt affiliate GGC International.
The company's lawyers aim to benefit from certain bankruptcy rules that prevent some creditors from being given preference over others.
The bankruptcy
rules allow a company to recover transfers that occur within 90 days before going bankrupt.
- However, attempts to recover funds through bankruptcy could sometimes be unsuccessful.
- FTX lawyers mainly want to recover $1.8B in loans and $273M of collateral given to Genesis by FTX's sister company Alameda Research.
- The funds also include $1.6B withdrawn by Genesis from FTX's trading platform and $213M taken out by GGC International.
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The move came nearly one month after FTX attorney Andy Dietderich revealed that the company recovered over $7.3B of crypto assets in cash and liquid.
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At the time, Dietderich also said the company was assessing the possibility of relaunching the exchange with its stakeholders and would make a final decision on the issue within the
current quarter, adding that a possible restart would require a significant amount of capital.
FTX, previously the third-largest crypto exchange, filed for Chapter 11 bankruptcy
in November 2022, with all the 130 entities under the roof of FTX Group.
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The downfall followed the claims that the former CEO Sam Bankman-Fried (SBF) used customer funds in FTX to compensate for losses at Alameda Research.
- SBF currently faces trial with 13 charges, including bank fraud, money laundering, and bribery, to which he pleaded not guilty.
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