A preliminary agreement between the bankrupt cryptocurrency companies FTX and Genesis will settle the allegations made by both parties in their ongoing dispute.
According to a letter filed by their attorneys with Judge Sean Lane, “The parties have agreed in principle, subject to documentation, to a settlement. According to the letter, “The parties have reached an agreement in principle, subject to documentation, for a settlement that would resolve, among other things, the claims asserted by the FTX Debtors against the Debtors in these Chapter 11 Cases and the claims asserted by the Genesis Debtors against the FTX Debtors in the FTX Chapter 11 Cases.
According to a January court document listing major creditors, Genesis was the largest unsecured creditor of FTX and related firms, owing $226.3 million. In parallel, FTX claimed that Genesis’ debt was approximately $4 billion, which was eventually reduced to $2 billion and refuted by Genesis.
Following FTX’s bankruptcy in November, Genesis Global Capital, the lending arm of Genesis, has temporarily suspended bond buybacks and new loan issuance. According to a company spokesperson, the move was made in response to the severe market turmoil and reduced confidence in the industry caused by FTX’s bankruptcy. In January, the company filed for bankruptcy protection, having already suffered losses of several hundred million dollars as a result of the bankruptcy of Three Arrows Capital.