The fallout from the collapse of major crypto exchange FTX continues, as the liquidator attempts to recover nearly $4 billion for creditors from another bankrupt crypto firm, Genesis Global Capital (GGC).
According to Wired, the court in the Southern District of New York will decide on June 15 whether to allow FTX to pursue GGC over payments made shortly before the exchange’s collapse, amid allegations of fraud.
GGC filed for bankruptcy in January, after being caught in the blowback from FTX’s implosion. However, the firm only has about $5 billion in assets, meaning that if the court allows FTX to go ahead, a zero-sum legal battle will ensue. This will result in very low recoveries for Genesis creditors, according to Ram Ahluwalia, CEO of wealth management firm Lumida Wealth.
Crypto Bankruptcies Spark Zero-Sum Legal Battles
The basis of FTX’s claim against GGC is provisioned in US bankruptcy laws…
