FTX Sues Genesis Digital to Recover $1.15B in Lost Funds

FTX Sues Genesis Digital to Recover $1.15 Billion in Lost Funds

Written by Aaron S.,

Editor-In-Chief

Last Updated: September 24, 2025

Key Takeaways

FTX’s bankruptcy team is suing Genesis Digital Assets to recover $1.15 billion in disputed transfers made before the exchange’s collapse;
The lawsuit claims Sam Bankman-Fried used Alameda Research to buy GDA shares at inflated prices using FTX customer funds;
The FTX estate said Bankman-Fried stood to profit personally from the deals while exposing customers and creditors to financial risk.

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The FTX Recovery Trust, a group managing the bankruptcy estate of FTX, has launched legal action to recover funds that were allegedly misused before the collapse of the exchange.

A lawsuit was filed on September 22 in the US Bankruptcy Court in Delaware, which targeted Genesis Digital Assets (GDA), some of its affiliated companies, and two co-founders, Rashit Makhat and Marco Krohn.

The filing claimed that more than $1.15 billion was moved to GDA through various transactions carried out under the direction of Sam Bankman-Fried, FTX’s former CEO.

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These transfers reportedly occurred during 2021 and 2022, a period when FTX was already experiencing financial trouble.

According to the complaint, Bankman-Fried allegedly used Alameda Research, a company under the same corporate umbrella as FTX, to buy GDA shares at high prices.

Around $500 million was spent on preferred shares, and another $550.9 million was sent to Makhat and Krohn in exchange for additional equity.

The lawsuit describes these actions as part of a larger pattern of using customer funds for questionable investments.

The FTX estate argued that Bankman-Fried had a personal interest in these deals. Since he owned most of Alameda, any increase in the value of GDA or the crypto market would have benefited him.

At the same time, the risk from these investments fell on FTX’s users and creditors.

Recently, Michelle Bond, the wife of former FTX executive Ryan Salame, sought to testify in her case involving illegal campaign donations. What did the filing state? Read the full story.