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FTX Trading wants to claw back $3.89 billion from Genesis Global
By Sarah Lizee
Olympia, Wash., May 3 – FTX Trading Ltd. is attempting to claw back about $3.89 billion from Genesis Global Holdco, LLC, according to a motion filed Wednesday with the U.S. Bankruptcy Court for the Southern District of New York.
“Genesis was one of the main feeder funds for FTX and instrumental to its fraudulent business model,” FTX said in its motion.
FTX said that at one point in 2021, Genesis had over $8 billion of outstanding loans to FTX debtor Alameda Research Ltd.
Unlike other FTX creditors and customers, Genesis was largely repaid, FTX said.
FTX said its claims against Genesis relating to some of those repayments represent significant avoidance actions in its Chapter 11 cases.
FTX claims Genesis received avoidable transfers from FTX in the 90-day period prior to the FTX petition date involving, among other things, a $1.8 billion repayment of loans to Genesis by Alameda, a $273 million pledge of collateral by Alameda to Genesis, and a $1.6 billion withdrawal of assets by Genesis from the FTX.com exchange.
FTX said it also believes that it holds avoidance claims against GGC International Ltd. arising from GGC’s asset withdrawals from the FTX.com exchange in a preference period in the estimated amount of about $213 million.
“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,” FTX said.
“These creditors include several million customers owed over $11 billion as of the time of filing of FTX Chapter 11 cases.”
FTX has headquarters in the Bahamas and filed Chapter 11 bankruptcy on Nov. 11 under case number 22-11068. Genesis Global is a New York-based cryptocurrency lender that filed bankruptcy on Jan. 19 under Chapter 11 case number 23-10063.
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