News

Genesis Extends Mediation Deadline for Eighth Time Amid Bankruptcy Struggles

Published

9 months ago

August 3, 2023

Bankrupt crypto lender Genesis Global Holdco LLC has extended its mediation deadline with creditors for the eighth time, now set for August 16, as reported by Bloomberg.

The company’s lawyer, Sean O’Neal, stated that it will not seek further extensions if substantial progress is not made within the next two weeks after subsequent extensions.

Genesis, a subsidiary of DCG, had been operating a crypto lending program called Earn in partnership with Gemini since 2021.

However, the company faced challenges and halted withdrawals in November 2022 due to market turmoil, subsequently filing for Chapter 11 bankruptcy.

The collapse of FTX affected the balance sheet of the company, hence, leading to a halt.

While there has been a mediation process between Genesis, with key stakeholders, including DCG and Gemini, since May 2023, trying to salvage a proposed bankruptcy exit plan backed by DCG, the process has not yielded much result for the funds held in Genesis’ custody.

During a recent hearing, Judge Lane approved the seventh extension of the mediation period, leaving Earn users and other individual creditors unaware of the status of discussions.

Gemini expressed frustration with the lack of progress and advocated for immediate disclosure of current proposals.

Speaking about previous extensions, Gemini said that it “remains concerned that a deal will be announced on the eve of the Disclosure Statement hearing without sufficient time for creditors, including Earn users, to evaluate the deal.”

It added that while it will continue to raise the concerns with Judge Lane, “Gemini will continue to push for Genesis, the UCC, and the AHG to disclose the supposed deal that they have been keeping secret so that all creditors can evaluate it.”

As the mediation deadline approaches, all parties involved will be closely watching the developments, hoping for a resolution that serves the best interests of creditors and leads to a viable plan for Genesis’s future.