The ongoing bankruptcy case involving crypto lender Genesis took a new turn when U.S. Bankruptcy Court Judge Sean Lane extended the mediation period between the lender and its creditors, including crypto exchange Gemini. The extension comes amid growing tensions over the role of Genesis’ parent company, Digital Currency Group (DCG), in the restructuring process. The judge’s decision to prolong the mediation period, originally slated to end last month, until June 16, has left some creditors frustrated and impatient.
These concerns were voiced by Anson Frelinghuysen of Hughes Hubbard & Reed, who represents Gemini, who argued that continuous delay and lengthy litigation could inflict greater financial harm on those affected by the bankruptcy. Furthermore, Frelinghuysen emphasized that both Gemini and its Earn users’ patience was “wearing thin.”
The postponement comes as a consequence of the multi-billion dollar collapse of Genesis’ borrower – crypto exchange FTX – prompting centralized cryptocurrency exchange Gemini to freeze withdrawals of its crypto lending product Gemini Earn. Gemini Earn customers, already facing difficulties due to Genesis’ financial woes, expressed their disappointment at the extension of the mediation period during the hearing.
Despite sympathizing with creditors’ concerns, Judge Lane sought to clear misconceptions about the mediation process timeline and its impact on court proceedings. He maintained that shortening the mediation duration wouldn’t necessarily speed up the case, while extending it could prompt a more efficient resolution.
In addition to these developments, Judge Lane declined requests to include FTX in the settlement talks, as the exchange claims it is owed $3.9 billion by Genesis. Instead, he granted more time for the parties involved in the case to devise a revised proposal for distributing payments among Genesis’ numerous creditors.
Genesis, on the other hand, denies owing FTX any money and has requested the case’s judge to estimate the exact amount at the next hearing. This follows the crypto lender’s previous attempt to have FTX’s unliquidated claims assessed at zero, which adds another layer of intrigue and dispute to the proceedings.
In this unfolding scenario, one thing is clear – the resolution of Genesis’ bankruptcy case and its numerous legal intricacies remains far from being concluded. As the parties involved attempt to navigate and resolve their conflicts, those ultimately bearing the real-world consequences – the creditors, investors, and users – continue to anxiously await the final outcome.