Crypto lender Genesis is currently undergoing mediation with its key creditor group to finalize a restructuring plan, yet one company involved has expressed frustration over the pace of progress. On April 30th, Gemini revealed in a tweet that a 30-day mediation process had been agreed upon with Genesis, parent company Digital Currency Group (DCG), Unsecured Creditors Committee (UCC), and Gemini. The company supports mediation but highlighted their annoyance regarding the slow speed of negotiations and the need for urgency.
The mediation aims to move forward with a proposed bankruptcy exit plan submitted in February, which anticipated creditors recovering 80% of their lost funds. While DCG has backed the plan, the UCC has opposed the restructuring deal, demanding better terms. The May 4th court appearance for Genesis will provide a better understanding of the situation, and the company hopes to have two mediation sessions before May 8, with the deal’s final terms made public thereafter.
A mediator, to be chosen by both Genesis and the UCC, will oversee the process. Though potential mediators have been contacted, further details of the procedure will be given to the court once a mediator is selected.
On April 25th, DCG provided their thoughts on the mediation motion through their official Twitter account. The conglomerate expressed concerns that the settlement could prolong the legal process due to renewed demands from Genesis creditors. Additionally, DCG struggled to grasp the creditors’ rationale, given their limited engagement since the plan proposal in February.
This ongoing saga comes after Genesis filed for Chapter 11 bankruptcy in a New York District Court back in January. The lender estimated its liabilities to be between $1 billion and $10 billion, with assets in a similar range. Genesis was among several firms affected by liquidity issues in the aftermath of the FTX collapse.
The ongoing mediation between Genesis and its key creditor group raises some concerns about the company’s future and highlights the need for swifter resolution. While some parties support the restructuring plan, others demand better terms, which could prolong the legal proceedings. The main conflict rests in the disagreement between those advocating for the proposed plan and those who challenge it, with the mediation process set to determine the final outcome.
Overall, the developments in this case will be closely watched by the crypto community, as it underscores the complexities and challenges involved in securing stable financial solutions for lenders and creditor groups. Furthermore, it serves as a reminder that in the ever-evolving world of cryptocurrencies, a balance between innovative practices and reliable security measures is essential for long-term success.