Bankrupt crypto exchange FTX has challenged a claim by Genesis that it owes no money to FTX. In a court filing, FTX said it is a major creditor of Genesis and was not invited to a mediation session arranged by the court in May. Genesis allegedly handpicked the participants in the mediation.
FTX claims that it is owed $3.9 billion in cash and cryptocurrency from Genesis. The company alleges that Genesis was one of the main feeder funds for FTX and instrumental to its fraudulent business model.
Genesis has denied FTX’s claims and has said that it is in good financial health. The company has 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.
The dispute between FTX and Genesis is the latest sign of trouble in the crypto lending industry. In recent months, several crypto lenders have collapsed, including Celsius Network and Three Arrows Capital. These collapses have raised concerns about the stability of the entire crypto market.
The outcome of the dispute between FTX and Genesis could have implications for the entire crypto lending industry. If FTX is successful, it could lead to other creditors filing lawsuits against Genesis. This could further destabilize the crypto lending industry and could lead to more collapses.