- Genesis aims to reduce its claim against 3AC from $1 billion to $33 million, representing just 3.3% of the original claim.
- The proposed settlement includes relinquishing claims to Avalanche (AVAX) and Near Protocol (NEAR) tokens in favor of 3AC.
Settling for Stability
In a court filing dated November 9, Genesis outlined its intention to finalize the settlement, marking a drastic reduction in the amount owed by 3AC. This settlement is crucial for Genesis, as 3AC’s claim was the largest in the Chapter 11 bankruptcy cases linked to the FTX exchange collapse.
Genesis emphasizes the importance of this settlement in facilitating its Chapter 11 reorganization process. By eliminating the risks, expenses, and uncertainties associated with protracted litigation, Genesis aims to ensure smoother and more efficient distributions under its reorganization plan.
A Strategic Release from Liabilities
A significant aspect of the proposed agreement is Genesis’s decision to release its entitlement to specific cryptocurrency tokens. Specifically, Genesis is set to forfeit its claims to Avalanche and Near Protocol tokens, transferring these assets to 3AC. This action is part of a broader strategy to mutually release liabilities between the two parties, aiming to streamline the bankruptcy proceedings.
The proposal, filed at the United States Bankruptcy Court for the Southern District of New York, awaits Judge Sean Lane’s approval. Creditors have until November 24 to raise objections, with a hearing scheduled for November 30.
Genesis and 3AC: Navigating the Aftermath of FTX Collapse
The settlement proposition comes amid the one-year anniversary of the FTX exchange collapse, which plunged the cryptocurrency industry into a deep bear market. Both Genesis and 3AC have been significantly impacted by the downfall of FTX, with Genesis’s derivatives business suffering a substantial loss due to funds locked on the failed platform.
In conclusion, the settlement agreement proposed by Genesis represents a critical juncture in its bankruptcy proceedings. By significantly reducing its claim against 3AC, Genesis is looking to move forward with its reorganization plans, aiming to stabilize its operations in the aftermath of the FTX collapse and ongoing market challenges.