Genesis Settle's With FTX in Bankruptcy, Good News for Gemini?
FTX, a cryptocurrency exchange that collapsed, initially claimed that crypto lender Genesis owed them up to $3.9 billion, but Genesis disagreed with this. The amount in dispute was later reduced to a maximum of $2 billion.
In a letter to the bankruptcy judge on Thursday, July 27, their lawyers said that both parties’ claims against each other will be resolved through the agreement. They are going to ask the bankruptcy courts to approve the deal. However, the letter didn’t mention the specifics of the settlement.
Further, the settlement is likely to bring relief to many creditors of Genesis. Both parties were worried that the disagreement would cause delays in the bankruptcy process and the payment of claims.
The legal counsels for both firms stated that they intend to “promptly document the Settlement and file a motion pursuant to Federal Rule of Bankruptcy Procedure 9019(a) for entry of an order approving the Settlement in their respective courts.”
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Must ReadGenesis Bankruptcy and Fued With Gemini
Earlier this year in January, Genesis sought Chapter 11 bankruptcy protection in a New York federal bankruptcy court. This decision was made after facing financial losses due to the collapses of Three Arrows Capital and FTX, two crypto hedge funds, in the previous year.
Furthermore, Genesis has entered a major feud with crypto exchange Gemini, with the latter claiming that it has more than $1 billion of its customer deposits with Genesis. After all failed negotiations, Gemini filed a lawsuit against Genesis over allegations of fraud against creditors and failing to return their funds.
In their filing, Gemini co-founder Cameron Winklevoss said that they were initially ready to stop its Earn product in October 2022. However, Barry Silbert convinced them to continue with it, even though he knew that Genesis was facing significant insolvency issues.
The Winklevoss twin stated that Silbert lied, despite the glaring deficiencies in Genesis’s financial records.