FTX Trust Sues Genesis Digital for $1.15B in SBF Fund Misuse
FTX Recovery Trust filed a $1.15 billion lawsuit on September 22 in the US Bankruptcy Court for the District of Delaware against Genesis Digital Assets, its affiliates and co-founders Rashit Makhat and Marco Krohn. The complaint alleges that former CEO Sam Bankman-Fried directed Alameda Research to use customer funds to buy GDA shares at inflated prices. Approximately $500 million was spent on preferred stock and $550.9 million was transferred to Makhat and Krohn for additional equity. The FTX Recovery Trust aims to claw back these misused funds to boost creditor recoveries. Since the 2022 bankruptcy, the trust has distributed over $6 billion to claimants and plans to release a further $1.6 billion on September 30.
Neutral
The lawsuit targets corporate entities and the misuse of customer funds rather than a specific cryptocurrency token. In the short term, legal proceedings are unlikely to trigger price movements since no tradable token is directly affected. Over the long term, successful fund recoveries may improve creditor outcomes but will not alter the fundamentals or supply of any digital asset. Therefore, the market impact remains neutral.