Genesis’s $2B dispute with FTX threatens to derail creditor payouts.

In a high-stakes legal battle, cryptocurrency lending giant Genesis finds itself entangled in a $2 billion dispute with digital asset exchange FTX. This fierce legal showdown not only threatens to disrupt the operations of both entities but also poses potential delays in creditor payouts.

Both companies have filed for bankruptcy and are currently working under the supervision of the court to collect money owed to creditors. Genesis is further along in this process, and the judge overseeing its insolvency case has been asked to consider approving a payout plan for the company next month. Judge Sean Lane of the United States Bankruptcy Court stated during a video hearing on Thursday that the schedule is looking overly optimistic.

FTX asserts that Genesis, which is controlled by Digital Currency Group, owes approximately $2 billion in unpaid fees and other expenses. During the hearing, both Genesis and FTX presented competing resolution strategies for the claim. Additionally, FTX is requesting that the court allow it to file a lawsuit against Genesis in Wilmington, Delaware, which is being presided over by a different federal judge.

On the other hand, Genesis wants Lane to schedule a hearing to determine whether the purported debt exists and, if it does, the amount of it. Initially, FTX stated that Genesis owed it a total of $3.9 billion; however, in a letter to Lane, they revised the amount to approximately $2 billion. Genesis has expressed its denial that it owes FTX anything and has requested that Lane provide an estimate of zero for FTX’s claim. 

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