The deal, which also waives Genesis’ similar claims against FTX, represents a considerable scaling down from the around $4bln FTX originally sought

FTX’s Alameda Research can make a claim worth $175mln from the estate of similarly bankrupt crypto firm Genesis, as per a legal deal submitted in Wednesday court filings.

The deal, which also waives Genesis’ similar claims against FTX, represents a considerable scaling down from the around $4bln FTX originally sought.

Lawyers hope it will help the firms end up affairs and return funds to customers, after lender Genesis Global Capital filed for insolvency earlier this year.

“The settlement will, among other things, considerably ease the path to confirmation of the Genesis Debtors’ chapter 11 plan of reorganization” without the cost of extended litigation, according to a court filing by Genesis’ lawyers.

In a parallel court filing, FTX’s CEO John J. Ray III agreed the deal was fair, saying it represented the best interests of FTX given legal uncertainties about the claims.

The crypto winter has seen the failure of several crypto firms which often had complex financial interrelationships, which lawyers are now trying to unravel in parallel bankruptcy proceedings.

FTX’s initial claims against Genesis totalled $3.88bln, including loan repayments made by hedge fund arm Alameda Research and assets withdrawn by Genesis from the FTX exchange in the run up to its November insolvency.

In the other direction, Genesis Global Capital is FTX’s biggest unsecured creditor, with court filings citing $226mln owed.

In July, lawyers said they had reached an agreement in principle but did not reveal full details. The deal has now been submitted to the judges administering each firm for approval, with hearings set for September 6 and 13.