According to recent reports, cryptocurrency company Genesis has suspended customer withdrawals in its lending unit, adding to the already tumultuous landscape of the digital currency industry.
This halt follows the company’s bankruptcy filing earlier this year, triggered by the Gemini exchange’s refusal to facilitate customer withdrawals.
The situation has escalated, involving legal intervention and a settlement between Genesis and FTX, shedding light on the challenges faced by the company and the wider crypto ecosystem.
Bankruptcy Judge Approves $175 Million Settlement Between Genesis and FTX
According to Scott Melker, author and host of a crypto podcast called “The Wolf Of All Streets”, a bankruptcy judge in New York has recently approved a $175 million settlement between Genesis Global Trading and FTX.
This resolution allows Alameda Research, FTX’s trading arm, to receive the settlement amount from the bankrupt crypto lender. The settlement effectively addresses multiple claims made by FTX against Genesis, resulting in a substantial reduction from the initial claim amounts, which totaled approximately $3.9 billion.
While Genesis considers the settlement “fair and equitable,” some FTX creditors have expressed dissatisfaction and voiced their desire for a contested resolution, according to Melker.
The approval of the settlement occurs amidst Genesis’s exposure to the collapse of FTX in 2022 and the ongoing trial of FTX founder Sam Bankman Fried. Bankman Fried faces numerous charges, including fraud and money laundering, further complicating the situation.
Overall, Genesis’s decision to suspend customer withdrawals, bankruptcy filing and subsequent settlement with FTX, underscores the challenges inherent in the cryptocurrency industry.
The ongoing legal proceedings, including the trial of FTX founder Sam Bankman Fried, continue to add uncertainty and complexity to the situation.
What is Certain is the fact that the outcome of the Genesis-FTX settlement and the resolution of the FTX trial will shape the future trajectory of the industry.
Featured image from Shutterstock, chart from TradingView.com
