Bankrupt cryptocurrency exchange FTX is locked in a fierce dispute with Genesis over claims that the latter owes it no money.
FTX, asserting itself as a major creditor, has raised objections to Genesis’ handling of the mediation process, alleging that it was deliberately excluded from the proceedings.
The clash between the two entities adds another layer of complexity to the settlement discussions, involving parent company Digital Currency Group (DCG) and other creditors. This article delves into the details of the dispute and its potential implications for both parties.
- FTX’s Surprise and Genesis’ Justification:
- FTX expressed surprise at Genesis’ declaration that FTX’s unresolved claims were worthless, which was seen as an attempt to expedite the confirmation of a Chapter 11 plan.
- FTX claims to be owed $3.9 billion in cash and cryptocurrency by Genesis and alleges that Genesis played a significant role in FTX’s fraudulent business model.
- Genesis’ Argument for Swift Resolution:
- Genesis argued that pursuing FTX’s claims through the regular legal process would cause unnecessary delays in managing its administrative process.
- Genesis aims to finalize a plan by August and requested an extended exclusive period for discussions, which FTX and other creditors have opposed.
- FTX’s Inclusion in Mediation Process:
- FTX, along with other Genesis creditors, objected to the exclusion of FTX from the mediation session and raised concerns about the fairness of the proceedings.
- FTX insists that its involvement is crucial for the mediation to effectively resolve the claims and argues against continuing the process without its participation.
- DCG’s Payment Failure and Genesis’ Bankruptcy:
- DCG recently failed to fulfill a $630 million payment owed to Genesis, further complicating the situation.
- Genesis, previously known for offering interest to clients for lending their digital coins, halted withdrawals in November, partly due to its connection to FTX’s bankruptcy, before filing for bankruptcy itself in January.