FTX Receives Court Approval to Sell LedgerX for $50 Million Amid Bankruptcy Proceedings

FTX Receives Court Approval to Sell LedgerX for $50 Million Amid Bankruptcy Proceedings

FTX, a cryptocurrency exchange that filed for Chapter 11 bankruptcy in November, has been granted permission by a US bankruptcy court to sell its non-bankrupt crypto derivatives trading platform, LedgerX, for $50 million. The sale will enable FTX to raise additional funds to repay its creditors, including $11 billion owed to customers.

FTX Seeks Repayment from Genesis Global Capital

In an attempt to repay its creditors, FTX has filed a court document seeking repayment of almost $4 billion from Genesis Global Capital (GGC), the bankrupt lending arm of crypto firm Genesis. FTX claims that Genesis owes it the money as a result of transactions that took place shortly before FTX’s bankruptcy filing. Under US bankruptcy law, debtors can attempt to claw back payments made in the 90 days before a bankruptcy filing to distribute the funds more equitably among creditors.

Crypto Lending Industry Intertwined During Turbulent 2022

The crypto lending industry saw many companies tumble into bankruptcy during a turbulent 2022. FTX, once a prominent crypto exchange, filed for Chapter 11 amid allegations that founder Sam Bankman-Fried used FTX customers’ money to prop up Alameda’s balance sheet. Bankman-Fried has pleaded not guilty to fraud charges, while former members of his inner circle have pleaded guilty and agreed to cooperate with prosecutors. Alameda Research, an affiliated hedge fund, borrowed $8 billion from Genesis, with Genesis largely repaid before FTX went bankrupt.

Overall, FTX has recovered more than $7.3 billion in cash and liquid crypto assets since filing for bankruptcy, with the sale of LedgerX expected to raise additional funds to repay its creditors.

Technology

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