FTX estate management confirms next payment as Genesis Digital Assets contests $1 billion refund claim

The estate management process of the bankrupt cryptocurrency exchange FTX is entering a phase where complex legal disputes and creditor repayments are happening simultaneously. The estate management organization has scheduled the next payment for March 31, while there are successive objections from parties such as Genesis Digital Assets.

Payment Confirmation at the End of March Based on February 14 Records

The estate management organization announced that, based on the latest records as of February 14, the next creditor payment from FTX’s bankruptcy estate will be made on March 31. This payment schedule is one of the most closely watched repayment processes in the crypto industry, attracting the interest of many creditors.

At the same time, the estate administrator has revised the proposed reduction of contested claim reserves. If this revised plan is approved by the bankruptcy court, it could free up more funds for creditors by reallocating short-term capital.

Legal Background of Genesis Digital Assets’ Objections

Bitcoin mining company Genesis Digital Assets is strongly objecting to the approximately $1 billion repayment claim sought by FTX’s estate management organization. According to Bloomberg Law, Genesis is seeking to dismiss the lawsuit and is challenging the legal basis of the estate’s claims.

Genesis’s objections are related to the legal legitimacy of the fund transfers pointed out by the estate management. The company argues that the estate’s pursuit of alleged illegal fund movements lacks sufficient legal grounds and is requesting the dismissal of the lawsuit.

Cloverback Strategy and Expansion of Asset Recovery

FTX’s estate management is implementing a comprehensive asset recovery strategy beyond just the repayment process. They continue to pursue lawsuits aimed at recovering assets allegedly transferred unlawfully before the exchange’s collapse in November 2022, and are pursuing similar cloverback lawsuits against other trading partners besides Genesis Digital Assets.

This cloverback strategy involves not only identifying remaining assets but also using legal means to challenge transfers made in the past. The estate management believes that many of the fund movements just before the 2022 collapse were unjustified, and aims to recover those funds.

Legal Disputes on Both Sides: Creditors and Trading Partners

As FTX’s bankruptcy proceedings progress, two major developments are occurring in parallel. One is the actual cash repayment to creditors, and the other is the legal disputes over past fund transfers challenged by trading partners such as Genesis Digital Assets.

The progress of estate management is shaping a multi-billion dollar dispute that will influence the final amounts received by creditors and the potential return of funds already received by trading partners. With multiple parties, including Genesis Digital Assets, raising objections, this bankruptcy resolution process is becoming more complex than just a payment procedure, and legal decisions will significantly impact the final distribution.