{"id":7399,"date":"2023-06-06T17:26:37","date_gmt":"2023-06-06T17:26:37","guid":{"rendered":"https:\/\/www.bitrabo.com\/community\/crypto-firms-fight-over-crumbs-ftx-and-genesis-battle-for-4-billion\/"},"modified":"2023-06-06T17:27:32","modified_gmt":"2023-06-06T17:27:32","slug":"crypto-firms-fight-over-crumbs-ftx-and-genesis-battle-for-4-billion","status":"publish","type":"post","link":"https:\/\/www.bitrabo.com\/discover\/crypto-firms-fight-over-crumbs-ftx-and-genesis-battle-for-4-billion\/","title":{"rendered":"Crypto Companies FTX and Genesis Global Capital Battle Over $4 Billion"},"content":{"rendered":"\n<div>\n<p>The liquidator of FTX, a major cryptocurrency exchange, is trying to recover almost $4 billion for creditors from another bankrupt cryptocurrency firm, Genesis Global Capital (GGC). But GGC has only $5 billion in assets, meaning that if FTX is allowed to pursue GGC, it would result in a legal battle with low recoveries for Genesis creditors. The court in the Southern District of New York will decide on June 15 whether to allow FTX to go ahead with its claims over payments made shortly before the exchange\u2019s collapse, amid allegations of fraud.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Zero-Sum_Legal_Battles_Sparked_By_Crypto_Bankruptcies\"><\/span>Zero-Sum Legal Battles Sparked By Crypto Bankruptcies<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>US bankruptcy laws state that everyone owed money by a failed business should receive a fair share, and liquidators have the right to recall any payments made by a stricken company in the 90 days before its bankruptcy. FTX&#8217;s case is that GGC is instrumental to its fraudulent business model and should therefore have its payments reversed. GGC lent money to Alameda Research, FTX&#8217;s sister company, but was caught in the blowback from FTX\u2019s collapse.<\/p>\n<p>At the time of the bankruptcy, GGC had $175 million locked up on the FTX platform, which led to a surge in redemptions. Unable to meet the influx, GGC was forced to suspend withdrawals as it sought an emergency cash injection, and ultimately, to file for bankruptcy itself. Hence, FTX claims that each transaction GGC made with FTX should be reversed.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Legal_Experts_Skeptical_About_FTXs_Chances_in_Clawback_Claim\"><\/span>Legal Experts Skeptical About FTX\u2019s Chances in Clawback Claim<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Legal experts are concerned that all other creditors in GGC&#8217;s bankruptcy could be affected if FTX&#8217;s $4 billion clawback claim is successful, especially as Gemini, the cryptocurrency exchange run by Cameron and Tyler Winklevoss, is the largest GGC creditor after FTX. Gemini&#8217;s yield farming service, Gemini Earn, fed into GGC\u2019s loan book, with $900 million of its customers\u2019 assets locked inside when GGC filed for bankruptcy. However, even if the New York judge allows FTX\u2019s claim to continue, the case may never get to court, with clawback cases almost always resulting in a settlement.<\/p>\n<figure style=\"width: 1813px\" class=\"wp-caption aligncenter\">\n        <figcaption class=\"wp-caption-text\">BTC\u2019s recovery on the 1-day chart. Source: BTCUSDT on TradingView.com<\/figcaption><\/figure>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The liquidator of FTX, a major cryptocurrency exchange, is trying to recover almost $4 billion for creditors from another bankrupt cryptocurrency firm, Genesis Global Capital (GGC). But GGC has only $5 billion in assets, meaning that if FTX is allowed to pursue GGC, it would result in a legal battle with low recoveries for Genesis [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":7401,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"slim_seo":{"title":"Crypto Companies FTX and Genesis Global Capital Battle Over $4 Billion - Bitrabo","description":"The liquidator of FTX, a major cryptocurrency exchange, is trying to recover almost $4 billion for creditors from another bankrupt cryptocurrency firm, Genesis"},"footnotes":""},"categories":[316],"tags":[1514,580,1542,504,1482,612,1183,754],"class_list":["post-7399","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto-news","tag-battle","tag-billion","tag-crumbs","tag-crypto","tag-fight","tag-firms","tag-ftx","tag-genesis"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.bitrabo.com\/discover\/wp-json\/wp\/v2\/posts\/7399","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bitrabo.com\/discover\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bitrabo.com\/discover\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bitrabo.com\/discover\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bitrabo.com\/discover\/wp-json\/wp\/v2\/comments?post=7399"}],"version-history":[{"count":0,"href":"https:\/\/www.bitrabo.com\/discover\/wp-json\/wp\/v2\/posts\/7399\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bitrabo.com\/discover\/wp-json\/wp\/v2\/media\/7401"}],"wp:attachment":[{"href":"https:\/\/www.bitrabo.com\/discover\/wp-json\/wp\/v2\/media?parent=7399"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bitrabo.com\/discover\/wp-json\/wp\/v2\/categories?post=7399"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bitrabo.com\/discover\/wp-json\/wp\/v2\/tags?post=7399"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}