Home
News
- 1 Genesis and its creditors agreed upon a 30-day mediation process to recover from bankruptcy.
- 2 Gemini supports the strategy but wants faster results.
Genesis, a crypto lender, and its key creditors agreed to a 30-day mediation process to proceed with the final restructuring plan. Gemini, however, supports the mediation process as a proposed bankruptcy exit plan but seems frustrated over its pace. On April 30, 2023,
Gemini Trying to Crop Out of Bankruptcy
Gemini tweeted that Genesis, the Digital Currency Group (DCG), the Unsecured Creditors Committee (UCC), and Gemini agreed to a 30-day mediation process in court on April 28, 2023.
The crypto exchange and custodian, Gemini, said that with this exercise, they wish to reach a conclusion as soon as possible and support the crypto lender, Genesis. But they have also expressed their frustration regarding the pace of progress among parties, highlighting its urgency.
The proposed mediation process is supposed to help the bankruptcy exit plan submitted on February 6, 2023, which expects creditors to recover 80% of lost funds. Genesis Global reached an “agreement in principle” with DCG and the UCC. This agreement will facilitate selling its crypto trading and market-making arms as a part of restructuring plans.
Now the DCG back the plan, but the UCC opposes wanting better terms in the deal.
Genesis is scheduled to appear in bankruptcy court on May 4, 2023. Sean O’Neal, its lawyer, said in court on April 30, 2023, that they are hoping for two mediation sessions before May 8, 2023. The deal’s final terms will be made public after the completion of the mediation process.
A mediator has to be selected on a priority by Genesis and the UCC; O’Neal argued that potential persons are being contacted, and the outline of the process will be submitted to the court after the completion of the selection process.
On April 25, the Digital Currency Group expressed its thoughts on the mediation process when Genesis filed the motion. The crypto conglomerate argued that the settlement process would prolong the court process. Also, the newly added demands are “difficult to understand the rationale” of Genesis’ creditors. The reason cited was the limited time frame since the plan was proposed in February.
Once the world’s third-largest crypto exchange, FTX filed for bankruptcy on November 11, creating a contagion effect. Genesis halted withdrawal on November 16, 2023, due to heavy exposure to the collapsed crypto exchange. Eventually, on January 20, 2023, Genesis Global Capital, Genesis HoldCo, and Genesis Asia Pacific filed for Chapter 11 bankruptcy in the U.S. bankruptcy court of Southern District New York (SDNY). At the time, the estimated liabilities were between $1 Billion and $10 Billion, with assets in the same range.
Genesis Global Holdco argued about some options, like selling some things and using a $150 Million cash reserve to support restructuring. However, while under the Chapter 11 process, a company is temporarily sheltered from its creditors, they try to restructure their finances.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
