Bankrupt cryptocurrency exchange FTX has filed a lawsuit seeking to recover nearly $4 billion from Genesis Global Capital, a crypto lender that filed for Chapter 11 bankruptcy earlier this year.
According to the court filing, FTX claims that it was able to withdraw its assets from the exchange before other creditors before the two firms filed for bankruptcy.
The filing alleges that Genesis was one of the main feeder funds to FTX and instrumental to its fraudulent business model. It also claims that the lender lent billions of dollars to Alameda Research, which was largely repaid by the time the firm collapsed.
Alameda reportedly repaid $1.8 billion in loans to Genesis, with an additional $273 million pledged in the 90 days before FTX collapsed.
FTX also alleges that Genesis withdrew $1.6 billion from the exchange, while Genesis Global Capital International withdrew $213 million.
The resolution of FTX’s clawback claims will depend on legal questions concerning the valuation of collateral and the proprietary FTT token, as well as payment practices on retail international cryptocurrency exchanges.
According to a Genesis spokesperson, the firm remains focused on its restructuring process, working to reach a consensual resolution that maximizes value for all Genesis clients and stakeholders.
The filing states that 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.