FTX takes another shot at recovering funds to compensate its creditors.
FTX, a now-bankrupt cryptocurrency exchange, is working to reclaim approximately $4 billion from the bankrupt crypto lender Genesis and a British Virgin Islands (BVI)-based entity, GGC International.
In a recent New York Bankruptcy Court filing, FTX's legal team targeted $1.8 billion in loans and a $273 million collateral pledge that Genesis allegedly received from FTX's sister trading company, Alameda Research.
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Additionally, FTX is pursuing $1.6 billion in withdrawals allegedly made by Genesis and $213 million reportedly withdrawn by GGC International before FTX filed for Chapter 11 bankruptcy on November 11th.
According to the filing, Genesis has been "largely repaid" for its loans provided to Alameda, "unlike other FTX creditors and customers." FTX accuses the bankrupt lender of being "one of the main feeder funds for FTX and instrumental to its fraudulent business model."
FTX's legal team is seeking these funds under bankruptcy laws allowing the recapture of "avoidable transfers" made within a 90-day period before a company declares bankruptcy.
Previous FTX clawbacks have targeted $3.2 billion in payments to former executives, a $460 million investment from Alameda into venture capital firm Modulo Capital, and roughly $93 million in political donations from founder Sam Bankman-Fried and other executives.
FTX's ongoing battle to recover billions of dollars from Genesis demonstrates the complexities of bankruptcy proceedings and the high stakes involved in the cryptocurrency industry.
However, although FTX aims to recover some funds, lawyers and the company's legal teams continue to ask millions for their services. FTX's legal fees and expenses for February accounted for a whopping $32.5 million, with a total bill for legal services in the first quarter coming to $103 million.
