FTX is attempting to recover around $4 billion from bankrupt crypto lender Genesis and a still solvent British Virgin Islands-based entity to recover value for creditors.
In a court filing, FTX sought $1.8 billion in loans and a $273 million collateral pledge allegedly given to Genesis from FTX's sister trading firm Alameda Research. FTX is also seeking to claw back $1.6 billion in withdrawals allegedly made by Genesis and a further $213 million purported to be withdrawn by its BVI-based entity GGC International from the exchange before it collapsed into Chapter 11 bankruptcy.
The filing claims Genesis was "largely repaid" its nearly $8 billion in loans made to Alameda, "unlike other FTX creditors and customers."
In bankruptcy law, a clawback refers to the recovery of payments, transfers, or assets made by a debtor prior to filing for bankruptcy. The purpose of a clawback in bankruptcy is to ensure that all creditors are treated fairly and equitably by preventing preferential treatment of certain creditors over others.
TokenInsight is dedicated to covering the most important and cutting-edge trends in the world of crypto. If you have information to share with us, please feel free to contact our email firstname.lastname@example.org. Your trust will be well respected.