FTX Recovery Trust demands $1,15 billion from Genesis Digital Assets
The lawsuit is related to the collapse of FTX and suspicious transactions by Alameda Research
24.09.2025 - 09:25
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2 min
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Key points:
- FTX Recovery Trust has filed a $1,15 billion lawsuit against Genesis Digital Assets
- FTX customer funds were used to purchase the shares.
- Signs indicating the risky nature of the trade were ignored.
The FTX Recovery Trust has filed a lawsuit against Genesis Digital Assets and related parties, demanding the return of $1,15 billion. The case is being heard in the US Bankruptcy Court in Delaware and is related to the ongoing aftermath of the FTX collapse.
What the trust alleges
According to the statement, Sam Bankman-Fried used money from his hedge fund, Alameda Research, to invest in Genesis Digital. However, according to the trust, GDA shares were purchased at inflated prices.
The purchases were made between August 2021 and April 2022. The money allegedly came directly from user funds on FTX.com. The lawsuit mentions Genesis Digital founders Rashit Makhat and Marco Krohn.
A significant portion of the funds, more than $550 million, was allegedly used to purchase shares from Makhat and Krohn. These transactions benefited the co-founders personally, raising serious questions about financial management and transparency.
Ignoring risks
The lawsuit states that there were several signs indicating the risky nature of the deal:
- Kazakhstan’s power grid was overloaded due to an influx of miners after the ban in China, and Genesis Digital was actively operating in the region;
- the company did not undergo an independent audit;
- the reports mentioned possible tax issues and suspicions of money laundering.
Despite all this, the investment was made, and in a short period of time, the company’s valuation skyrocketed from $3,25 billion to $12,2 billion.
Why it matters
The lawsuit is part of a larger program to recover funds lost after the collapse of FTX in 2022. The fund analyzes questionable transactions and attempts to return capital to victims. A victory in this case could compensate for a significant portion of investors’ losses.
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