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LedgerX deal approved by FTX, Genesis claims $3.9 billion

Photo: FTX

On Thursday, a U.S. bankruptcy court approved the sale of FTX’s LedgerX company for $50 million, providing the insolvent cryptocurrency exchange with the capital it needed to repay its creditors.

Judge John Dorsey of the United States Bankruptcy Court in Wilmington, Delaware, approved the sale of FTX’s non-bankrupt crypto derivatives trading platform, LedgerX, to a subsidiary of Miami International Holdings.

The Miami International Holdings company owns the Miami International Stock Exchange, the Bermuda Stock Exchange, and numerous other U.S.-registered stock exchanges.
FTX is attempting to repay approximately $11 billion to customers through asset sales and clawback actions. In addition, more than $7.3 billion in cash and liquid crypto assets have been recovered by FTX since the firm filed for bankruptcy in November, the company announced in April.

On Wednesday, FTX announced that it would pursue repayment of approximately $4 billion from Genesis Global Capital (GGC), the insolvent lending arm of cryptocurrency startup Genesis.

According to FTX’s bankruptcy declaration, Genesis owes it that sum because of dealings that occurred just before FTX declared bankruptcy. U.S. bankruptcy law allows debtors to attempt to recover payments made within the preceding 90 days to divide those monies more fairly among creditors.

According to FTX, the hedge fund Alameda Research, which is associated with FTX, utilized crypto assets borrowed from Genesis as a “feeder fund” to make more loans and investments.

According to FTX, Alameda formerly had $8 billion in Genesis loans. However, FTX claimed that, unlike other creditors, it had repaid most of its debt to Genesis before filing for bankruptcy.

During 2022, many companies in the crypto lending industry were intertwined and ultimately went bankrupt. After allegations surfaced that FTX founder Sam Bankman-Fried used customer funds to shore up Alameda’s finances, the once-prominent cryptocurrency exchange filed for Chapter 11.

Bankman-Fried has been charged with fraud for his involvement in the corporation’s demise, although he has maintained his innocence. Some of his former closest associates have pleaded guilty and agreed to help the government’s case.

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