FTX Group is attempting to recover nearly $3.9 billion in funds, consisting of cash and cryptocurrency, from the insolvent digital asset lender Genesis Global Capital LLC and its solvent affiliate, GGC International Ltd.
The funds in question are linked to $1.8 billion in loans and $273 million in collateral provided by Alameda Research Ltd., the now-defunct cryptocurrency trading firm founded by Sam Bankman-Fried, to Genesis Global Capital prior to its bankruptcy and concurrent collapse of FTX, as indicated by court documents filed on Wednesday.
Additionally, FTX Group alleges in the legal filings that $1.6 billion in assets were withdrawn from its trading platform by Genesis Global Capital before the bankruptcy, along with $213 million extracted by GGC International.
FTX aims to recoup these funds by employing bankruptcy regulations designed to prevent certain creditors from receiving preferential treatment.
Avoidable transfers, which encompass transactions made up to 90 days before a company’s bankruptcy, are subject to this provision.
However, it is important to note that efforts to reclaim funds through bankruptcy processes are not always successful.