FTX Trust sues Genesis Digital for $1.15 billion
FTX Trust launches major lawsuit against Genesis Digital Assets to recover over $1 billion allegedly transferred before FTX's bankruptcy.
Key Takeaways
- FTX Trust has filed a $1.15 billion lawsuit against Genesis Digital Assets as part of its bankruptcy asset recovery efforts.
- The lawsuit is one of the largest clawback actions since FTX collapsed in 2022, targeting funds allegedly transferred fraudulently before bankruptcy.
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FTX Trust, the legal entity overseeing asset recovery for creditors in the bankruptcy of the FTX cryptocurrency exchange, filed a $1.15 billion lawsuit against Genesis Digital Assets today. The suit targets the major Bitcoin mining company over alleged fraudulent transfers.
The lawsuit represents one of the largest clawback efforts in the FTX bankruptcy proceedings. Under U.S. bankruptcy laws, the trust can pursue “avoidance actions” to recover funds transferred fraudulently before bankruptcy.
Genesis Digital received over $1 billion in investments from Alameda Research in 2021-2022, making it one of the largest assets in the FTX bankruptcy case. Alameda Research was a quantitative trading firm closely tied to FTX.
The FTX collapse in late 2022 led to over $8 billion in missing customer funds, triggering numerous lawsuits and recovery efforts. The exchange filed for bankruptcy amid fraud allegations against its leadership.
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