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    Home»Bitcoin»FTX Trust Initiates $1.15 Billion Lawsuit Against Bitcoin Mining Firm Genesis Digital
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    FTX Trust Initiates $1.15 Billion Lawsuit Against Bitcoin Mining Firm Genesis Digital

    Ethan CarterBy Ethan CarterSeptember 23, 2025No Comments2 Mins Read
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    FTX Trust Initiates $1.15 Billion Lawsuit Against Bitcoin Mining Firm Genesis Digital
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    The FTX Bankruptcy Trust has initiated a $1.15 billion lawsuit against Bitcoin mining company Genesis Digital Assets, representing one of the most significant clawback efforts to recover assets lost in the FTX exchange’s collapse.

    The lawsuit claims that Genesis Digital and its co-founders received over $1 billion in fraudulent transfers from Sam Bankman-Fried’s Alameda Research during 2021 and 2022.

    ‘Great detriment’ to FTX customers

    The trust contends that these investments were made at “outrageously inflated prices” and contributed little or nothing of value to FTX’s already insolvent business.

    “Between August 2021 and April 2022, Bankman-Fried directed Alameda to acquire multiple tranches of shares in GDA, a Bitcoin mining company, at exorbitantly inflated prices,” the filing states. “While FTX Group funds were utilized to purchase these shares, only Alameda—and ultimately Bankman-Fried, who owns 90% of Alameda—was destined to benefit, to the significant detriment of FTX.com’s customers and other creditors.”

    Under U.S. bankruptcy law, the trust is authorized to pursue “avoidance actions”—lawsuits aimed at reclaiming funds improperly transferred prior to a company filing for bankruptcy.

    The magnitude of this lawsuit highlights the extent of FTX’s asset recovery initiative, which has evolved into one of the largest and most intricate cases in U.S. bankruptcy history following the exchange’s collapse in 2022.

    According to the filing, the majority of the funds originated from customer deposits on FTX.com that were redirected to Alameda Research and subsequently sent to Genesis Digital.

    The trust asserts that the co-founders of the mining firm, Rashit Makhat and Marco Krohn, gained personally by selling over $550 million worth of their shares to Alameda during this process.

    The lawsuit characterizes Genesis Digital as a politically influential miner in Kazakhstan, benefiting from low energy costs and favorable treatment under the nation’s former president, Nursultan Nazarbayev. However, by late 2021, Kazakhstan’s power grid faced pressure from an influx of miners, along with new taxes, blackouts, and social unrest, which destabilized the sector.

    The complaint claims that in spite of these evident risks—alongside unaudited financial records, concerns regarding money laundering, and a lack of interest from other investors—Bankman-Fried proceeded with substantial investments, as reported by Bloomberg.

    “Genesis Digital represents one of Bankman-Fried’s most reckless financial decisions, involving commingled and misappropriated funds,” the trust indicated in its filing.

    This case arises as Bankman-Fried serves a 25-year prison sentence after being convicted on seven criminal charges, including fraud and conspiracy, related to the downfall of FTX.

    Billion Bitcoin Digital Firm FTX Genesis Initiates lawsuit Mining trust
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    Ethan Carter

      Ethan is a seasoned cryptocurrency writer with extensive experience contributing to leading U.S.-based blockchain and fintech publications. His work blends in-depth market analysis with accessible explanations, making complex crypto topics understandable for a broad audience. Over the years, he has covered Bitcoin, Ethereum, DeFi, NFTs, and emerging blockchain trends, always with a focus on accuracy and insight. Ethan's articles have appeared on major crypto portals, where his expertise in market trends and investment strategies has earned him a loyal readership.

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