{"id":16324,"date":"2025-09-24T00:27:34","date_gmt":"2025-09-23T22:27:34","guid":{"rendered":"https:\/\/wsj-crypto.com\/?p=16324"},"modified":"2025-09-24T00:27:34","modified_gmt":"2025-09-23T22:27:34","slug":"ftx-trust-aims-to-recover-1-billion-from-genesis-digital","status":"publish","type":"post","link":"https:\/\/wsj-crypto.com\/index.php\/2025\/09\/24\/ftx-trust-aims-to-recover-1-billion-from-genesis-digital\/","title":{"rendered":"FTX Trust Aims to Recover $1 Billion from Genesis Digital"},"content":{"rendered":"

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The organization accountable for managing the cryptocurrency exchange FTX\u2019s insolvency lodged a lawsuit aiming to reclaim over $1 billion in assets transferred by its previous CEO, Sam \u201cSBF\u201d Bankman-Fried.<\/p>\n

In a filing made on Monday in the US Bankruptcy Court for the District of Delaware, the FTX Recovery Trust submitted<\/a> a complaint against the cryptocurrency mining firm Genesis Digital Assets (GDA), its subsidiaries, and two of its co-founders as part of its mission to recuperate $1.15 billion of \u201ccommingled and misappropriated assets.\u201d<\/p>\n

The filing states that the assets were directly associated with Bankman-Fried\u2019s \u201cdeception of customers and other creditors\u201d at FTX during 2021 and 2022.<\/p>\n

Source: <\/em>Kroll <\/em><\/a><\/figcaption><\/figure>\n

The lawsuit claimed that SBF instructed Alameda Research, FTX\u2019s sister organization under CEO Caroline Ellison, to acquire shares of GDA \u201cat excessively inflated prices\u201d\u2014over $500 million for 154 preferred shares. He reportedly also bought $550.9 million in GDA shares by transferring the assets directly to co-founders Rashit Makhat and Marco Krohn.<\/p>\n

\u201cBy 2021, Bankman-Fried had already diverted billions of dollars of customer assets from the FTX.com exchange to Alameda,\u201d the filing stated. \u201cIn spite of the increasing debt Alameda owed to FTX.com, Bankman-Fried facilitated Alameda\u2019s payment of over $1.15 billion for grossly overvalued GDA shares.\u201d<\/p>\n

The lawsuit continued:<\/p>\n

\u201cThe Transfers were structured to personally benefit Bankman-Fried: as the 90% owner of Alameda, he stood to gain almost all of the profit from GDA\u2019s inflated valuation and possible success (both of GDA and Bitcoin in general), while simultaneously transferring the losses onto the FTX Group\u2019s creditors and customers.\u201d<\/p><\/blockquote>\n

Related: <\/strong><\/em>Ex-FTX executive\u2019s plea agreement remains central to court proceedings<\/strong><\/em><\/a><\/p>\n

FTX Trust continues efforts to recover assets for clients<\/h2>\n

The lawsuit against Genesis Digital followed attempts by the FTX Recovery Trust to retrieve assets<\/a> related to the collapse of the exchange. FTX declared bankruptcy in 2022, with some of its former executives, including Bankman-Fried, currently serving prison sentences.<\/p>\n

According to the lawsuit, SBF \u201cdepended on blatant falsehoods and disregarded warning signs\u201d while deciding to invest in Genesis Digital. At that time, the company was located in Kazakhstan, which was undergoing an energy crisis, and allegedly presented financial documents to Bankman-Fried that \u201chad no relation to reality.\u201d<\/p>\n

In 2023, a bankruptcy court sanctioned a $175 million settlement<\/a> involving Genesis Global Trading\u2014unrelated to GDA\u2014that agreed to compensate FTX.<\/p>\n

After over two years in bankruptcy court, the FTX Recovery Trust initiated repayments to creditors in February. The recovery strategy commenced with a $1.2 billion disbursement for claimants, followed by a $5 billion distribution in May. It is anticipated to release $1.6 billion<\/a> for creditors on September 30.<\/p>\n

Magazine: <\/strong><\/em>Bitcoin is \u2018funny internet currency\u2019 during a crisis: Tezos co-founder<\/strong><\/em><\/a><\/p>\n