FTX Recovery Trust Files Massive $1.15B Lawsuit Against Genesis Digital - Crypto Industry Reels

FTX's cleanup crew just dropped a billion-dollar bomb on Genesis Digital.

The $1.15 billion lawsuit lands like a wrecking ball in crypto's fragile recovery landscape.

Legal Shockwaves

FTX's recovery trust isn't playing nice—they're going for the jugular with claims that could reshape how digital asset firms handle bankruptcy proceedings. The sheer scale of this action demonstrates how deep the cleanup goes from 2022's collapse.

Industry Fallout

Genesis Digital now faces a fight that could drain resources and credibility at the worst possible time. Market watchers brace for ripple effects across lending platforms and mining operations alike.

Because nothing says 'financial innovation' like lawyers fighting over the scraps of a collapsed empire.

FTX Trust sues Genesis Digital for $1.15B in misused funds

The FTX Recovery Trust wants a court order to recover the $1.15 billion, plus interest, to repay defrauded FTX customers. However, no hearing date is set, but with billions at stake, pressure on GDA continues.

Legal experts say the FTX lawsuit against Genesis Digital Assets reveals how FTX’s risky overseas deals, enabled by a lack of transparency, fueled its collapse. A bankruptcy lawyer, speaking anonymously, said this wasn’t just one bad investment but part of a larger pattern. 

In November 2022, FTX, a major crypto platform with strong Washington connections, went bankrupt after it was revealed that Sam Bankman-Fried misused about $8 billion of customer funds to support risky investments through Alameda Research. 

Convicted of fraud, he was sentenced to 25 years in prison in 2024, and the trust is still working to recover funds for affected customers. Recently, on September 20, 2025, FTX announced that it will distribute $1.6 billion to its creditors on September 30, 2025. 

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