FTX vs Genesis: Great debt reduction

 

A notable event occurred in a bankruptcy trial between two bankrupts. FTX was suing cryptolender Genesis.

The plaintiff’s lawyers initially demanded $3.9 bln from lender, arguing that this was the amount of the defendant’s debt. Genesis claimed to disagree with this amount.

As a result, the parties agreed to reduce the amount of debt to $2 bln.

The creditors of cryptolender breathed with relief, they expected long court proceedings and, accordingly, no chance of getting something.

At the same time there is a reasonable question: what arguments forced the representatives of FTX to reduce almost in half their requests and to give 2 billion to their debtor? What is it - a mistake in the exchange’s accounting or an understanding of the impossibility of getting more? The details of the settlement are unknown, so there are no answers to these questions.

Lado Okhotnikov, CEO of Meta Force commented on the settlement agreement:

«On the one hand, the agreement is good. The sooner this story will be closed, the better it will be for the entire crypto community. On the other hand, a $2 billion gift seems overly generous. There were reports that FTX accounting was far from perfect, some inaccuracies were possible, but inaccuracy of this size is too much for even the most frivolous accounting. Perhaps there was a price recalculation of the crypto, or maybe just understanding that Genesis simply has no more funds...»

 

#bankruptcy #FTX #Genesis