By
Temitope Olatunji
April 26th, 2024
The officials claim FTX-affiliated Alameda Research had largely repaid the $8 billion borrowed from Genesis Trading, a few weeks before the former filed for Chapter 11 bankruptcy protection.
The bankrupt FTX and Alameda Research officials are stopping at nothing to recover lost funds by the former administration led by Sam Bankman-Fried (SBF). The crypto exchange under John J. Ray III, Chief Executive Officer and Chief Restructuring Officer, has sued several entities including soliciting politicians from both isles to refund cash donated by SBF. Furthermore, Ray indicated the exchange may never recover all the lost funds but remains focused to get as much as possible.
FTX on Genesis Global
According to Wednesday’s court filings, FTX and Alameda Research current officials are seeking to get back nearly $4 billion paid to DCG-backed Genesis Trading. The officials claim FTX-affiliated Alameda Research had largely repaid the $8 billion borrowed from Genesis Trading, a few weeks before the former filed for Chapter 11 bankruptcy protection.
“The Avoidance Actions will seek to claw back funds received by Genesis and non-debtor affiliates so that these funds can be shared with all other creditors of the FTX Debtors in the FTX Chapter 11 Cases. These creditors include several million customers owed over $11 billion as of the time of filing of FTX Chapter 11 Cases,” the filing said.
Reportedly, Alameda Research repaid $1.8 billion in loans to Genesis Trading and pledged $273 million in the subsequent three months. Additionally, the filings noted that Genesis Trading withdrew another $1.6 billion from FTX, while Genesis Global Capital International withdrew another $213 million in that same period.
As a result, a motion hearing has been set for May 25 to discuss the matter in depth.
A Close Reflection
The current FTX officials have reportedly recovered around $5 billion in liquid assets including Solana, Bitcoin, and ETH. At some point, the current FTX officials are looking at reopening the exchange to accrue more resources for the debtors. In a recent update to the FTX debtors, Ray noted that former officials significantly misguided investors while they continued to squander their assets.
“We are continuing our efforts to review the events that factored into the fall of FTX and to identify and recover as much value as possible for creditors,” Ray noted.
Recently, the current FTX officials noted that they entered into an agreement with M7 Holdings, LLC, an affiliate of Miami International Holdings, Inc., for the sale of LedgerX LLC, the futures and options exchange and clearinghouse unit of FTX. Reportedly, FTX debtors were able to recover approximately $50 million from the LedgerX LLC transaction.
Meanwhile, FTX international entities including the Japan subsidiary have made tremendous progress in repaying investors.