FTX is seeking to recover $4 billion from Genesis, which has been bankrupt since January, to reimburse its customers. At the same time, FTX sold its stake in Mysten Labs (SUI) for $96 million, well below its market value which could have brought it $1.2 billion in profit. The funds will still be used to reimburse FTX customers.
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FTX sur le point de récupérer 4 milliards de dollars dans le cadre d’une procédure judiciaire ?
FTX wants to recover a large sum from Genesis
As part of its bankruptcy proceedings and with a view to raising as much funds as possible, the management team of FTX, chaired by John Ray III, has filed a lawsuit seeking to recover approximately $4 billion from Genesisa subsidiary of Digital Currency Group (DCG) which has been bankrupt since last January.
In the document filed on May 3 with the New York bankruptcy court, Genesis is referred to as the “primary feed fund” of FTX and Alameda Researchand the company is said to have played “an instrumental role in his fraudulent business model”.
The $4 billion here claimed from FTX relates to a sum of loans valued at $1.8 billion, as well as guarantees of $273 million granted by Alameda Research to Genesis. In parallel, FTX claims 1.6 billion dollars withdrawn by Genesis before its bankruptcy, and finally 213 million dollars to GGC International Ltd., a subsidiary of Genesis hosted in Bermuda.
The various companies did indeed maintain privileged relations, since according to certain reports, Genesis reportedly loaned $8 billion to Alameda Research in 2021.
This operation aims to allow FTX to reimburse its several million customers, to whom it owes more than 11 billion dollars according to the latest estimates.
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FTX sold its SUI tokens… well below their market value
On March 22, the team at the head of FTX had filed a motion to sell its stake in Mysten Labsthe company behind the Sui blockchain, whose eponymous token was recently listed on major cryptocurrency exchanges.
Effectively, FTX had invested $101 million as of August 2022 to secure preferred stock in Sui, as part of a Series B funding round that had raised the company’s valuation to $2 billion.
Thanks to this investment, FTX had obtained a subscription warrant allowing it to buy the equivalent of 888 million SUI tokens at a preferential rate. As of this writing, if FTX had sold its allocation at the current SUI token price, the platform could have generated more than 1 billion dollars in profit.
Unfortunately, the FTX teams sold some of their tokens in the month of March before finalizing the sale of the total allocation on April 14. In doing so, FTX sold all of its SUI tokens for $1 million. In other words, his earnings could have been 1,000 times greater..
In parallel with this sale, FTX resold its stake directly to Mysten Labs, bringing the total profit from the operation to $96 million for the platform formerly managed by Sam Bankman-Fried. These funds will participate in the operation to reimburse injured customers of the exchange.
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Source: Bloomberg
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Passionate about the world of decentralized finance and the novelties brought by Web 3.0, I write articles for Cryptoast to help make blockchain more accessible to everyone. Convinced that cryptocurrencies will change the future very soon.
Maximilien Prue
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