By
Bhushan Akolkar
April 26th, 2024
It is expected that both FTX and Genesis will soon file motions with the bankruptcy courts to seek approval of the deal.
In a surprising turn of events, two former major players in the cryptocurrency space, FTX Trading Ltd, and Genesis Global Holdco LLC, have decided to put an end to their protracted legal battle by reaching an in-principle agreement. According to reports from Bloomberg, the agreement, as conveyed by their legal representatives in a letter to the bankruptcy judge, will see both parties’ claims against each other settled.
The clash between FTX and Genesis emerged as the former claimed that it was owed a staggering sum of up to $3.9 billion by the latter. FTX, once a prominent player in the crypto exchange landscape, suffered a significant downfall that led to its Chapter 11 bankruptcy filing in November last year. Seeking to recover its losses and debt, FTX pointed to Genesis as a debtor.
However, Genesis promptly denied the claim, contesting the legitimacy and magnitude of the debt asserted by FTX. The dispute escalated rapidly, and both companies found themselves entangled in a legal battle.
As the negotiations progressed, it became apparent that a compromise was within reach. The initial claim of $3.9 billion was reduced to a less significant sum of $2 billion. After an extended period of disagreement and legal wrangling, the legal teams representing FTX and Genesis have jointly confirmed their intention to settle the ongoing dispute outside the courtroom.
FTX and Genesis Settlement: Approval Process Ahead
While the intention to settle has been made public, the specifics of the arrangement have been kept under wraps. The absence of specific information in the letter to the bankruptcy judge leaves the broader crypto community eager to learn more about the terms of the settlement.
It is expected that both FTX and Genesis will soon file motions with the bankruptcy courts to seek approval of the deal. The court’s approval procedure will almost certainly include a comprehensive review of the arrangement to guarantee its fairness and conformity with existing bankruptcy laws and regulations.
The judge will evaluate whether the terms of the settlement adequately address the claims made by both parties and whether it is in the best interest of all stakeholders involved. For creditors, a swift resolution is essential as it ensures they can receive their owed funds without prolonged delays.
A prolonged dispute could have resulted in significant uncertainty and financial strain on these creditors, possibly affecting their own financial stability and operations. The settlement agreement, therefore, offers them a sense of relief, knowing that their claims might be addressed more efficiently.
In addition, the settlement sends a positive signal to the broader crypto community, regulators, and potential investors. It demonstrates the willingness of major players in the industry to resolve disputes responsibly and collaboratively.
This can help to boost investor confidence in the crypto market while also easing concerns among other creditors working with various companies in the sector.