Gemini has raised objections to the Genesis bankruptcy plan, stating that its lack of clarity and limited information make it difficult to understand.
“These cases must move towards a resolution. It has been more than nine months since the Debtors stopped the repayments and denied the Gemini Lenders access to their digital assets,” the cryptocurrency exchange’s legal counsel further stated.
Frequent delays in the Genesis bankruptcy plan
In an Aug. 30 court filing, Gemini challenged DCG’s proposed bankruptcy plan. The roadmap suggests a way for creditors of the Genesis cryptocurrency lender to receive payments. However, Gemini maintains that it is unclear and lacks crucial information:
“The Debtors disclosed an ‘agreement in principle’ between the Debtors, the Committee, and DCG that is unfortunately light on detail and remains subject to final documentation.”
The plan states that unsecured creditors could get between 70% and 90% of the amount owed in USD. For asset recoveries, it could be 65% to 90%, depending on asset allocation.
However, Gemini argues once again that these facts lack transparency:
“The alleged recoveries of ‘~70-90%’ for unsecured creditors promoted by the Debtors in connection with the ‘agreement in principle’ are completely without foundation and cannot be explained through the spent terms provided by the Debtors.”
Recently, the situation has only gotten worse. Creditors have not received payments on loans that were due to be paid after they were due in May. The filing notes that the combined value of these loans is approximately $630 million.
Gemini maintains that despite frequent mentions of the planes, there is no substantial evidence to suggest their imminent execution:
“Despite the Debtors’ repeated promises that a settlement is very close, the Debtors are no closer to a confirmable plan that enjoys creditor support today than when these cases were filed in January.”
The Decline of Genesis Began After the Collapse of a Major Exchange
Genesis encountered difficulties following the November 2022 collapse of the cryptocurrency exchange FTX. Previous records indicated that the cryptocurrency lender owed approximately $3.5 billion to its top 50 creditors.
On May 4, reports revealed that FTX creditors were seeking $4 billion from Genesis. They allege that the lender moved its assets out of FTX before other creditors filed for bankruptcy.
FTX further alleged that Genesis was “one of FTX’s main feeder funds and central to its fraudulent business model.”
At the time, a Genesis spokesman explained that he was actively working on the restructuring process. The spokesperson stated that the bankrupt lender wants to ensure the best possible outcome for its clients and stakeholders.
By Audy Castaneda
