FTX sues crypto miner Genesis Digital Assets for $1.15B

Core Points - The FTX Recovery Trust has initiated a lawsuit against Genesis Digital Assets for $1.15 billion, aiming to recover funds from a significant investment made by former FTX CEO Sam Bankman-Fried [1][2] - Bankman-Fried's investment in Genesis Digital Assets, which is based in Kazakhstan, occurred between October 2021 and April 2022, and was characterized by "flagrant misrepresentations and overlooked red flags" [2][5] - The lawsuit highlights that Bankman-Fried's investment decisions were based on unreliable financial information and failed to consider Kazakhstan's energy issues, which were exacerbated by an influx of cryptocurrency miners [3][5] Investment Details - Bankman-Fried's initial investment in Genesis Digital Assets was $100 million, which later increased significantly due to a perceived "insane and off-market" valuation [4] - Following regulatory changes in Kazakhstan that limited energy usage for crypto mining, Genesis Digital Assets sought additional funding to relocate operations to the U.S. [4] - The lawsuit claims that over half of the invested funds were diverted to the personal accounts of GDA co-founders, allowing them to benefit personally while the company struggled [5] Recovery Efforts - The FTX Recovery Trust is actively working to recover investments made by FTX to reimburse creditors, having distributed approximately $6 billion between February and May of this year, with an additional $1.6 billion planned for disbursement this month [6]