FTX is attempting to recover around $4 billion from bankrupt crypto lender Genesis and a still solvent British Virgin Islands-based entity to recover value for creditors.
In a court filing, FTX sought $1.8 billion in loans and a $273 million collateral pledge allegedly given to Genesis from FTX's sister trading firm Alameda Research. FTX is also seeking to claw back $1.6 billion in withdrawals allegedly made by Genesis and a further $213 million purported to be withdrawn by its BVI-based entity GGC International from the exchange before it collapsed into Chapter 11 bankruptcy.
The filing claims Genesis was "largely repaid" its nearly $8 billion in loans made to Alameda, "unlike other FTX creditors and customers."
In bankruptcy law, a clawback refers to the recovery of payments, transfers, or assets made by a debtor prior to filing for bankruptcy. The purpose of a clawback in bankruptcy is to ensure that all creditors are treated fairly and equitably by preventing preferential treatment of certain creditors over others.
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