According to recent reports, Genesis, the crypto lender platform, has agreed to enter a 30-day mediation process, as announced by Sean O’Neal, an attorney representing the company. This mediation process will involve the platform committing to its unsecured creditors.
O’Neal revealed that the proposed restructuring agreement had faced opposition from the committee. To address this, Genesis has planned two important mediation meetings before May 8 for a mutually agreeable solution. Once the mediation process is completed, Genesis intends to disclose the agreement’s specifics to the public.
Earlier this week, Genesis submitted a request to the authorities to seek permission to appoint a mediator. The purpose was to enable Genesis and Digital Currency Group, the owner of Genesis, to agree on the terms and conditions of Digital Currency Group’s contribution to the debtors’ restructuring plan.
On April 25, reports emerged stating that several creditors on the Genesis platform had withdrawn from a previous agreement. Their withdrawal was primarily due to their dissatisfaction with Digital Currency Group (DCG), the parent company of Genesis, and its contribution to the restructuring plan.
Genesis has outstanding obligations amounting to almost $3.4 billion, out of which $2.4 billion is owed to its principal creditors.
Genesis notified its top creditors in March, informing them about the amount owed and the auction date. The crypto lending platform stated that the deadline for creditors to request their owed amount is May 22, and the auction will occur on June 27. The interested bidders are supposed to submit their request by May 5.
On January 19, 2023, Genesis filed for bankruptcy protection, limited to its lending arm. Unlike many other crypto companies that have failed and completely shut down, Genesis’s other services usually function.
While the news of bankruptcy may raise concerns among the customers of the lending arm, the fact that the rest of the company is operating without any disruption should be reassuring. It is a testament to the resilience and strength of Genesis’s overall business model that only one division has been impacted.
