Startup DreamersStartup Dreamers
  • Home
  • Startup
  • Money & Finance
  • Starting a Business
    • Branding
    • Business Ideas
    • Business Models
    • Business Plans
    • Fundraising
  • Growing a Business
  • More
    • Innovation
    • Leadership
Trending

One Of The Best Action Movies Ever Made Lands On Netflix Today

July 12, 2025

How Young People Earn 5 Figures Without a 9-5 Job: Report

July 12, 2025

Siblings With Self-Funded 8-Figure Brand Share Business Tips

July 12, 2025
Facebook Twitter Instagram
  • Newsletter
  • Submit Articles
  • Privacy
  • Advertise
  • Contact
Facebook Twitter Instagram
Startup DreamersStartup Dreamers
  • Home
  • Startup
  • Money & Finance
  • Starting a Business
    • Branding
    • Business Ideas
    • Business Models
    • Business Plans
    • Fundraising
  • Growing a Business
  • More
    • Innovation
    • Leadership
Subscribe for Alerts
Startup DreamersStartup Dreamers
Home » Bankrupt Crypto Companies Are Fighting Over a Dwindling Pot of Money
Startup

Bankrupt Crypto Companies Are Fighting Over a Dwindling Pot of Money

adminBy adminJune 6, 20232 ViewsNo Comments3 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr Email

Legal experts, though, say they’re skeptical of FTX’s chances. Marc Powers, adjunct professor of law at Florida International University, who acted as counsel in the liquidation of Bernie Madoff’s infamous Ponzi scheme, says that the exchange is attempting to “jump ahead of the other creditors” in the GGC bankruptcy. “Why should the FTX bankruptcy, or FTX as a potential creditor of Genesis, be more important than any other?” he asks.

The largest of those GGC creditors is Gemini, the crypto exchange founded by Cameron and Tyler Winklevoss. The firm’s yield farming service, Gemini Earn, which allowed customers to earn interest on their crypto, fed into GGC’s loan book. When the lender filed for bankruptcy, $900 million of Gemini customers’ assets were locked inside.

Gemini has already liquidated $280 million worth of collateral posted in August by GGC to make back some of the funds lost. But should FTX be successful in its clawback, the 340,000 Gemini Earn customers will be left significantly out of pocket. Gemini did not respond to a request for comment.

“I don’t think the Genesis bankruptcy court will grant the motion of FTX,” Powers says. “Given the size of the claim, I think it would be extremely disruptive.”

Yet in the event the motion is granted, things will get messy. There would effectively be two judges, from different jurisdictions, involved to some degree in both bankruptcies, says Powers. “That’s generally not good.”

If the case proceeds, GGC will likely argue that the $1.8 billion in loan repayments were made in the ordinary course of business, which would exempt them from being recalled. There are also questions, Powers and others point out, posed by FTX’s failure to specify the dates of the withdrawals in its filing.

But it’s not guaranteed that, even if the New York judge allows FTX’s claim to continue, the dispute will ever get to court. The likelihood that clawback cases make it all the way to litigation, says Alan Rosenberg, partner at law firm MRTH and member of the American Bankruptcy Institute, is low—they almost always end in settlement. And FTX can use this fact to its advantage. “The truth is, there’s an economic consideration to be taken into account when defending [against clawbacks],” says Rosenberg. “Even if you have a great defense, it’s going to cost money to litigate. So you have to make a decision as to whether it’s more cost-effective to pay an amount to get rid of the claim.”

The only mercy for creditors, says Rosenberg, is that both FTX and GGC—as bankrupt entities—have a fiduciary duty to reach an agreement as quickly as possible. “Everybody’s goal is to make a distribution to creditors. The more you fight, the more it will deplete the estate,” he says. “Both parties have an interest in reaching a resolution swiftly.”

Ahluwalia doesn’t share the same optimism. He says the likely result would be a protracted negotiation between the lawyers of FTX and GGC over the validity and scope of the clawback claim—all of which will be paid for on the creditors’ dime.

Settling these issues will take time. But the longer the legal conflict goes on, the more money leaks from the creditors’ pot into the pockets of the law firms. “I don’t think the FTX claim is valid. I think it’s a stretch,” says Ahluwalia. “I think John Ray is billing creditors for a remote possibility. And who is making out like bandits? The lawyers.”

Read the full article here

Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

Related Articles

The Teens Are Taking Waymos Now

Startup July 11, 2025

Trump’s Defiance of TikTok Ban Prompted Immunity Promises to 10 Tech Companies

Startup July 10, 2025

What Could a Healthy AI Companion Look Like?

Startup July 9, 2025

These Startups Are Building Advanced AI Models Without Data Centers

Startup July 7, 2025

Airplane Wi-Fi Is Now … Good?

Startup July 6, 2025

eBay and Vestiaire Collective Want an Exemption from Trump’s Tariffs

Startup July 5, 2025
Add A Comment

Leave A Reply Cancel Reply

Editors Picks

One Of The Best Action Movies Ever Made Lands On Netflix Today

July 12, 2025

How Young People Earn 5 Figures Without a 9-5 Job: Report

July 12, 2025

Siblings With Self-Funded 8-Figure Brand Share Business Tips

July 12, 2025

Today’s NYT Mini Crossword Clues And Answers For Friday, July 11th

July 11, 2025

Why Your Finance Team Needs an AI Strategy, Now

July 11, 2025

Latest Posts

Teen’s Side Hustle Became a Multi-Hundred-Million-Dollar Business

July 11, 2025

The Teens Are Taking Waymos Now

July 11, 2025

Taylor Vs. Serrano 3 Will Set A World Record—Here’s How To Watch

July 10, 2025

13 Jobs Without College or AI: Salaries Can Start at $70k+

July 10, 2025

How to Deal With Slow-Paying Customers the Right Way

July 10, 2025
Advertisement
Demo

Startup Dreamers is your one-stop website for the latest news and updates about how to start a business, follow us now to get the news that matters to you.

Facebook Twitter Instagram Pinterest YouTube
Sections
  • Growing a Business
  • Innovation
  • Leadership
  • Money & Finance
  • Starting a Business
Trending Topics
  • Branding
  • Business Ideas
  • Business Models
  • Business Plans
  • Fundraising

Subscribe to Updates

Get the latest business and startup news and updates directly to your inbox.

© 2025 Startup Dreamers. All Rights Reserved.
  • Privacy Policy
  • Terms of use
  • Press Release
  • Advertise
  • Contact

Type above and press Enter to search. Press Esc to cancel.

GET $5000 NO CREDIT