What will creditors think? FTX offered discounts on pre-sale tokens to executives of the bankrupt Genesis.
Two actors in today's comedy, Genesis on one side and FTX on the other, in yet another surprising scandal. The first is the credit and liquidity arm of DCG, a troubled company that is already under bankruptcy protection. The second is the exchange that collapsed last November, sinking the bitcoin and cryptocurrency market. Fortunately, that market has since recovered.
According to a report in the Financial Times, Genesis executives got some tokens launched by FTX ahead of the market and, more importantly, at a discount. There's nothing wrong with transactions between individuals? That depends, since Genesis is a major liquidity provider for both Alameda and FTX, and its involvement has helped give FTX an extra aura of credibility.
Among the tokens allegedly involved in private transactions, according to FNS, are $FTTT and $SRM Serum.

Genesis executive specials: another FTX scandal

The FTX and Genesis executives share a scandal. Let's break it down in order, because the devil is always hiding in the details. According to a recent Financial Times investigation, Genesis executives (not the company, but the executives) were allegedly offered $FTT and $SRM before the sale and therefore before it was open to the public. The first is a useful token tied directly to the FTX exchange, one of the most efficient exchanges during the heyday of the Sam Bankman-Fried exchange. The second is tied to one of the many projects in the Solana ecosystem initiated by Sam Bankman-Fried himself.
So what could go wrong? It depends on the evaluation. In fact, such an offer would not be directed at Genesis, but at its executives, and it is more reasonable to suspect that such a gift influenced business decisions and the opening of certain lines of credit.
As far as we know today, Genesis is, among other things, one of FTX's biggest creditors, which is trying to recover more than $200 million in Chapter 11 bankruptcy that the FTX empire is facing.
The system, which is actually more widespread than people would like to admit, gives a big advantage to those who get tokens of this type before they are offered to the general public.

There are also some denials

There are some denials from an unnamed former Genesis executive, but he can't refute the story reported by the FT, at least for now. It is to be expected that such offers are targeted - to those with more decision-making power.
According to the Financial Times, the FTT token offer did not have the effect SBF had hoped for, and company executives subsequently regretted the token's impressive breakout.
That same regret led them to later agree to pre-sell Serum for fear of missing out on another great opportunity.

This approach will make some people angry

Not entirely happy with this revelation is Thomas Brazier, co-founder of 507 Capital. This company has acquired claims in several bankruptcy proceedings in the cryptocurrency world. In other words, it has acquired securities representing claims in bankruptcy proceedings, and therefore now has a direct interest in making the returns from those proceedings as high as possible.
This is a comment pertaining to the way SBF operates, which is said to have practically covered the gold of several major players in the sector.
The courts will now have to investigate and determine the quality and quantity of the relationship between Genesis and FTX, which, according to key sources familiar with the facts, will go far beyond the usual financial relationship between a lender and a market maker regularly in need of liquidity.
Since both companies are in bankruptcy proceedings under U.S. law, there is sure to be an investigation into what happened. So will an investigation into the possible involvement of the holding company that controls Genesis in such transactions: the digital currency group is in serious crisis, and the world's most important bitcoin trust is also managed by DCG, which has repeatedly raised concerns throughout the industry.