Genesis seeks court’s approval to reduce Three Arrows Capital claim from $1B to $33M

Bankrupt cryptocurrency lender Genesis is seeking court approval for a settlement agreement with Three Arrows Capital (3AC), which would reduce the hedge fund's claim from $1 billion to $33 million.

Genesis has filed a court document arguing that the 3AC debtor should receive an allowed general unsecured claim against Genesis amounting to $33 million, which represents 3.3% of the original $1 billion in claims. The settlement agreement would also see Genesis relinquishing all claims and entitlements to AVAX and NEAR tokens in favor of the 3AC debtor.

Genesis stated that the $1 billion claims made by 3AC against the lender were the largest asserted claims in Chapter 11 cases related to the collapse of the FTX exchange. The proposed settlement is seen as crucial for Genesis's Chapter 11 reorganization plans and to reduce the risks and expenses associated with litigation.

The settlement agreement has been filed with the United States Bankruptcy Court for the Southern District of New York and requires approval from Judge Sean Lane. Creditors have until November 24 to object to the settlement, with a hearing scheduled for November 30.

The FTX exchange collapse, which occurred one year ago, had a significant impact on the cryptocurrency industry, leading to a bear market. Genesis and 3AC are among the companies affected by the failure of FTX, with Genesis's derivatives business losing access to $175 million on the collapsed platform.