FTX sues mining company Genesis to recover $1.15 billion misappropriated by SBF

The FTX bankruptcy liquidation team filed a lawsuit against the Bitcoin miner Genesis Digital Assets (GDA) in the bankruptcy court of Delaware, USA on 9/23, demanding repayment of $1.15 billion. The team alleged that this investment was the most extravagant operation by former CEO SBF before the collapse of FTX, and that he even misappropriated client funds and mixed them in.

The team filed a lawsuit against GDA, demanding the repayment of over a hundred million dollars.

The FTX liquidation team has filed a lawsuit in the U.S. Bankruptcy Court for the District of Delaware, seeking the repayment of $1.15 billion from GDA. The complaint states that SBF injected a large amount of funds into GDA's subsidiary in Kazakhstan before the collapse of FTX, with $550 million being directly transferred to GDA co-founders Rashit Makhat and Marco Krohn.

The liquidation team emphasized that the money for this investment was actually funds appropriated from clients.

Once heavily invested by Alameda, now the controversy is back on the table.

According to previous reports, the quantitative trading company Alameda Research, which is highly related to FTX, had invested approximately $1.15 billion in GDA in 2022, pushing GDA's valuation to $5.5 billion that year.

This also indirectly allowed GDA to hold FTX's funds, and it was warned by creditors that it needed to return the related assets.

( has received an investment of 1.1 billion USD from Alameda! Mining company Genesis Digital Assets is interested in a US IPO )

GDA is accused of serious inflation in valuation and distorted financial reports.

The liquidation team pointed out that GDA's valuation was significantly high, while at that time Kazakhstan was experiencing political turmoil, unstable power supply, and frequent power outages. Coupled with the new tax system and strict energy limits, the impact on Bitcoin mining was considerable. This investment of 1.15 billion USD was far too risky at the time and did not align with normal business judgment.

More seriously, GDA not only failed to provide audited financial statements, but even the submitted unaudited version does not match the actual financial situation, making it impossible to determine whether the company's operating condition is good.

SBF doesn't listen, knowing the risks yet still wants to throw money.

Despite encountering numerous warning signs during due diligence, such as poor cooperation, information distortion, valuation imbalance, and deteriorating energy policies, SBF insisted on pushing forward with this massive investment, which was criticized by the liquidation team as “the most outrageous capital operation.”

Currently, GDA states that it will not comment on the matter, which has been accepted by the Delaware bankruptcy court, and whether it can successfully recover 1.15 billion dollars still awaits judicial decision.

(Multiple exchanges and institutions holding FTX “dirty money” may face up to ten years of imprisonment)

This article reports that FTX has sued mining company Genesis to recover the $1.15 billion that SBF misappropriated from investments, first appearing in Chain News ABMedia.