FTX Trust Drops $1.15 Billion Lawsuit Against Genesis Digital

An FTX trust voluntarily dismissed its lawsuit against Bitcoin mining company Genesis Digital Assets Ltd., ditching its attempt to gain back $1.15 billion in funds it said were fraudulently transferred by the bankrupt cryptocurrency exchange’s co-founder.

The trust, which is tasked with recovering funds for FTX creditors, dropped all claims with prejudice, according to a Monday filing in the US Bankruptcy Court for the District of Delaware.

The lawsuit alleged Genesis Digital, along with its affiliates and co-founders, received commingled and misappropriated funds from FTX co-founder Sam Bankman-Fried between August 2021 and April 2022.

The company alleged that Bankman-Fried used his personal hedge fund, Alameda Research LLC, to purchase several tranches of shares in the Bitcoin mining company at heavily inflated prices.

Genesis Digital, a Crypiot company headquartered in Dubai, moved to dismiss the lawsuit in January. The company argued that it shouldn’t be forced to defend claims in a US bankruptcy court when it doesn’t have US offices, among other reasons.

Counsel for the FTX trust didn’t immediately respond to a request for comment about why it dropped the suit. Counsel for Genesis Digital didn’t immediately respond to a request for comment either.

The suit was part of a larger effort by the FTX trust to claw back billions of dollars in assets following the company’s collapse in 2022. Bankman-Fried was sentenced to 25 years in prison in 2024 after playing a role in several fraud and conspiracy schemes.

The FTX trust is represented by Sullivan & Cromwell LLP and Landis Rath & Cobb LLP. Genesis Digital is represented byLatham & Watkins LLP and Young Conaway Stargatt & Taylor LLP.

The case is FTX Recovery Tr. V. Genesis Digital Assets Ltd., Bankr. D. Del., No. 1:25-ap-52358, Dismissal 6/15/26.