Crypto exchange Gemini is in a tug of war with Genesis’ proposed bankruptcy resolution, underlining its lack of specifics and failure to bring satisfactory assurances to its key creditors. Alongside Gemini, two other validated creditor groups have voiced similar reservations.
Previously, Digital Currency Group and Genesis’ creditors seemed to have come to an understanding. However, this proposed deal fell through when Gemini pointed fingers at Barry Silbert and DCG for outstanding payments that were initially owed to the Winklevoss’ crypto platform.
Legal representatives from Gemini hold that the agreement in principle lacks the clarity necessary for an acceptable resolution. Shoulder to shoulder with Gemini, the Fair Deal Group and the Ad Hoc Group of Genesis Lenders have also expressed doubt and uncertainty about the proposed plan’s inadequacies.
While Gemini is troubled by the limited information provided by Genesis and DCG’s outstanding debt of around $630 million that should have been settled by May 2023, the Fair Deal Group argues that the proposed agreement does not cover all of Genesis’ debts comprehensively. They also express concern about Genesis’ capacity to execute a sustainable plan.
In the meantime, the Ad Hoc Group of Genesis Lenders is questioning DCG’s role in the proposed bankruptcy resolution, further reinforcing the perception that the creditors are not sufficiently addressed.
These prominent creditor groups are calling for an end to the solo negotiation period, which has seen Genesis continually ask for extensions, promising an impending resolution involving DCG. The increasing infringements from Gemini and other creditors shine a light on the knotty situation of Genesis’ bankruptcy proceedings.
The recent financial fiasco endured by Genesis, directly linked to the crypto downturn of 2022, has activated creditor groups who are now requesting more transparent and fulfilling terms. These developments undoubtedly echo the ripple effects of the FTX bankruptcy in November of the previous year, underscoring the far-reaching impacts within the industry when a major player stumbles.
Source: Cryptonews
