FTX loses Genesis bankruptcy mediation case.

FTX, a now-bankrupt crypto lender Genesis Global’s creditor, will not be allowed to participate in the settlement talks between Genesis and its parent company Digital Currency Group (DCG), owned by Barry Silbert, according to a ruling by US Bankruptcy Judge Sean Lane. The talks aim to develop a revised payout proposal that will serve as the basis for a Chapter 11 bankruptcy plan to repay Genesis’ major creditors. The decision to exclude FTX overruled objections from FTX and some Genesis customers demanding clarity on their claims. The settlement talks will remain confidential, and Judge Lane emphasized the need for confidentiality during mediation.

Genesis plans to update its reorganization plan, which will be subject to creditor voting once filed. Judge Lane will consider these votes when deciding whether to approve the proposal. Genesis disputes FTX’s claim of owing $3.9 billion and has requested an estimation to determine the exact amount, which will be considered by Judge Lane at another hearing later this year.

FTX, which filed for bankruptcy last year, has recovered more than $7.3 billion in cash and liquid crypto assets under its new management in April this year. The exchange’s new management has also floated the idea of restarting the exchange business to maximize value for remaining stakeholders.

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