• The FTX Group is slowly clawing back funds from various businesses
  • The team succefully recouped $3.2 billion in payments made to the crypto exchange's former executives
  • It also recovered $460 million investment by Alameda Research on Modulo Capital

As part of its efforts to recover value for creditors, embattled crypto exchange FTX wants to recover around $4 billion from the now-bankrupt crypto lender Genesis Global Capital LLC and a non-bankrupt affiliate, GGC International Ltd, which it said was "instrumental" for the "fraudulent" business model of the exchange.

FTX group intends to recoup $1.8 billion of loans, as well as $273 million of collateral given to Genesis by its sister company and Sam Bankman-Fried-founded crypto hedge fund Alameda Research.

The said funds were apparently handed to the crypto lender shortly after FTX filed for Chapter 11 bankruptcy protection and Bankman-Fried and his inner circle resigned from their respective posts in the company, according to court papers filed Wednesday.

Aside from that, the FTX Group also wants to recover $1.6 billion in withdrawals allegedly made by Genesis and another $213 million reportedly withdrawn by Genesis' non-bankrupt British Virgin Islands-based affiliate, GGC International Ltd., from the exchange before it came crashing down in November 2022.

The court filing also showed that the FTX Group branded Genesis as "one of the main feeder funds for FTX and instrumental to its fraudulent business model." It also suggested that the bankrupt crypto lender appeared to have been heavily favored by the previous FTX administration.

"At one point in 2021, GGC had over $8 billion of outstanding loans to FTX Debtor Alameda Research Ltd. ("Alameda"). Unlike other FTX creditors and customers, Genesis was largely repaid," the court papers revealed.

Moreover, the FTX Group explained that the reason behind its reason action against Genesis is for the purpose of sharing the recovered funds with all other creditors of the company.

"The Avoidance Actions will seek to claw back funds received by Genesis and non-debtor affiliates so that these funds can be shared with all other creditors of the FTX Debtors in the FTX Chapter 11 Cases. These creditors include several million customers owed over $11 billion as of the time of filing of FTX Chapter 11 Cases," the court filing read.

The legal action by FTX's legal team is under bankruptcy laws that allow the company to recover "unavoidable transfers" that took place in a 90-day period before the business declared bankruptcy.

"Genesis Debtors received avoidable transfers from the FTX Debtors in the 90-day period prior to the FTX Petition Date," FTX claimed.

The FTX Group under John Ray III has made several clawbacks in the past, which include $3.2 billion in payments made to the crypto exchange's former executives, $460 million investment by Alameda Research on Modulo Capital and $93 million in political donations made by Bankman-Fried and several other former FTX executives.

Illustration shows FTX logo