FTX receives clearance for LedgerX sale, makes $3.9 billion Genesis claim
Bankrupt crypto exchange FTX won US bankruptcy court clearance on Thursday to sell its LedgerX firm for $50 million, earning more money to repay creditors.
At a hearing in Wilmington, Delaware, US Bankruptcy Judge John Dorsey authorized approval on FTX's sale of LedgerX, its non-bankrupt crypto derivatives trading platform, to an affiliate of Miami International Holdings.
Miami International Holdings controls the Bermuda Stock Exchange and many U.S.-registered securities exchanges, including the Miami International Securities Exchange.
FTX is aiming to refund an estimated $11 billion to clients via a mix of asset sales and clawback procedures. Since declaring for bankruptcy in November, FTX has recovered more over $7.3 billion in cash and liquid crypto assets, the business announced in April.
As part of that bigger attempt, FTX on Wednesday stated it will pursue repayment of roughly $4 billion from Genesis Global Capital (GGC), the insolvent lending arm of crypto company Genesis.
FTX alleged in a court statement that Genesis owes it that money as a consequence of transactions that took place just before FTX's bankruptcy filing. Under U.S. bankruptcy law, debtors may strive to claw back payments made in the 90 days preceding a bankruptcy filing so that the money can be more equally divided among creditors.
Genesis was a main "feeder fund" for FTX-affiliated hedge fund Alameda Research, loaning Alameda crypto assets that it utilized for additional loans and investments, according to FTX.
At one time, Alameda owned $8 billion in loans given by Genesis, according to FTX. Genesis, unlike other creditors, was substantially compensated before FTX went bankrupt, FTX stated.
Companies in the crypto loan market were heavily interconnected during a volatile 2022 that saw several slide into bankruptcy. FTX, a once-prominent crypto exchange, filed for Chapter 11 after charges that CEO Sam Bankman-Fried used FTX clients' money to shore up Alameda's financial sheet.
Bankman-Fried has been indicted on fraud charges for his part in the company's failure, and he has pled not guilty. Former members of his closest circle have pleaded guilty and promised to assist with prosecutors.
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