FTX Trust Sues Crypto Miner Genesis Digital Over $1.15 Billion

An FTX trust sued Bitcoin mining company Genesis Digital Assets Ltd. to claw back $1.15 billion it says was fraudulently transferred by the fallen cryptocurrency exchange’s co-founder, Sam Bankman-Fried.

Genesis Digital, its affiliates, and its co-founders Rashit Makhat and Marco Krohn are being pushed to turn over funds the trust says Bankman-Fried fraudulently transferred to them through commingled and misappropriated assets from the FTX business.

Most of the funds came from customer deposits at the FTX.com exchange, the FTX Recovery Trust said in a complaint filed Monday in the US Bankruptcy Court for the District of Delaware.

The suit is part of a yearslong effort by the trust set up under FTX’s bankruptcy wind-down plan to recover funds for creditors following the exchange’s historic 2022 collapse. Bankman-Fried is serving a 25-year sentence after being convicted of seven offenses, including fraud and conspiracy.

Genesis Digital was a Bitcoin mining firm based in Kazakhstan, which the FTX trust said benefited from political connections to the country’s former president, Nursultan Nazarbayev, including access to inexpensive energy. As China cracked down on Bitcoin mining in 2021, miners moved to Kazakhstan, putting strain of its electric grid, the complaint said.

The company’s alleged preferential treatment was hurt following a series of events in Kazakhstan throughout 2021, including a new tax on cryptocurrency miners, rolling blackouts, energy rationing, social unrest over energy prices, and Nazarbayev’s resignation, the complaint said.

The issues resulted in Genesis Digital seeking financing to move and expand in the US, the complaint said.

The FTX trust said between August 2021 and April 2022 Bankman-Fried used his personal hedge fund, Alameda Research LLC, to invest in Genesis Digital at “outrageously inflated prices” while the broader FTX business was insolvent. Alameda received much less than a reasonably equivalent value for its $1.15 billion investment, the trust said.

Bankman-Fried ignored several red flags at Genesis Digital, the suit said. Those included the energy crisis at the Kazakhstan operating location, a lack of interest from other significant investors, unaudited financial records, unsigned financials, and reports linking Genesis Digital to money laundering and tax evasion, the complaint said.

Genesis Digital’s large increase in valuation from $3.25 billion in July 2021 to between $8.3 billion to $12.2 billion in November 2021 was described by one of its own board members as “insane and off-market,” the complaint said.

Bankman-Fried in December 2021 went to Kazakhstan and met with President Kassym-Jomart Tokayev to try to allay misgivings about cryptocurrency mining, but failed, the complaint said.

Genesis Digital “stands as one of Bankman-Fried’s most reckless investments with commingled and misappropriated funds,” the complaint said.

The firm didn’t immediately have comment.

The investments enriched Bankman-Fried and allowed Genesis Digital’s founders to “cash out of a failing company,” the suit said. The deal allowed Makhat and Krohn to sell $550.9 million of their personal shares directly to Alameda, the complaint said.

The FTX trust is represented by Sullivan & Cromwell LLP, Quinn Emanuel Urquhart & Sullivan LLP, and Landis Rath & Cobb LLP.

The case is FTX Recovery Trust v. Genesis Digital Assets Limited, Bankr. D. Del., No. 25-52358, complaint 9/22/25.