To recoup its losses, bankrupt cryptocurrency exchange FTX has filed court documents seeking $1.8 billion in loans and a $273 million collateral pledge it claims was given to Genesis Global Capital by FTX’s sister trading firm, Alameda Research.
FTX is also pursuing the recovery of $1.6 billion in withdrawals that it alleges were made by Genesis and an additional $213 million that it claims was withdrawn by Genesis’ BVI-based entity, GGC International, from the exchange before it filed for Chapter 11 bankruptcy.
In court documents filed on Wednesday, FTX exchanges asserted that it had repaid Genesis Global Capital nearly $8 billion owed to Alameda, in contrast to other FTX creditors and customers. This claim was made in response to Genesis’ filing for bankruptcy in January.
FTX has accused the cryptocurrency lender platform of being a significant source of funds for its fraudulent business model. According to FTX, the lender platform played a crucial role in facilitating the fraudulent activities of FTX. FTX has alleged that the lender platform was instrumental in its fraudulent business practices.
The attorneys representing the exchange are taking legal action to recover funds transferred within 90 days of the company’s bankruptcy filing, known as a clawback. This action follows the bankruptcy regulations that allow for the recovery of “avoidable transfers” deemed fraudulent.
The attorneys are pursuing this action to ensure that all creditors are treated fairly and equitably by preventing preferential treatment of certain creditors over others. By recovering these funds, the court can enhance fairness in its ruling and uphold the principles of justice in bankruptcy proceedings.
