Bankrupt cryptocurrency lender Genesis is seeking court approval for its proposed settlement agreement with the collapsed crypto hedge fund Three Arrows Capital (3AC).
In a court filing on Nov. 9, Genesis argued that the 3AC debtor should receive an allowed general unsecured claim against Genesis in the amount of $33 million, which represents 3.3% of the $1 billion in claims originally asserted against Genesis debtors.
The document stated, “Agreement provides that the 3AC debtor shall receive an allowed general unsecured claim against GGC in the amount of $33 million in full and complete satisfaction of the more than $1 billion dollars in claims asserted against each of the Genesis debtors.”
Genesis emphasized that 3AC’s $1 billion claims against them were the largest asserted claims in Chapter 11 cases associated with the FTX exchange collapse. Genesis also noted that the 3AC debtor was one of its largest borrowers from 2020 to 2022, up until the time of its collapse.
Additionally, Genesis expressed its intention to relinquish all claims and entitlements to AVAX (AVAX) and NEAR (NEAR) tokens in favor of the 3AC debtor and to drop any remaining liabilities.
“The Genesis debtors and 3AC mutually release each other from liability as set forth in more detail in the Settlement Agreement; and the Genesis debtors expressly retain, and do not otherwise release, any and all claims that they may have against DCG.”
Genesis stated that the settlement was necessary to facilitate its Chapter 11 reorganization plans and to reduce potential risks and expenses from litigation.
The proposed settlement agreement has been filed with the United States Bankruptcy Court for the Southern District of New York and requires Judge Sean Lane’s approval. Creditors have until Nov. 24 to object to the settlement, and a hearing is scheduled for Nov. 30.
The news comes around the one-year anniversary of the FTX exchange collapse, which triggered a massive bear market in the cryptocurrency industry. Genesis and 3AC are just a few of the many companies affected by the FTX failure, with Genesis derivatives business losing access to $175 million locked on FTX.