Gemini Hopes for Swift Genesis Mediation Process
- Genesis, its parent company Digital Currency Group, the Unsecured Creditors Committee, and Gemini have all agreed to a 30-day mediation process.
- Although supportive of the process, Gemini expressed the “need for urgency” for a final resolution to be reached “as soon as possible”.
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Cryptocurrency exchange Gemini has expressed its frustration on record over the pace of progress in Genesis’ bankruptcy process, and the new 30-day mediation period, the company said via Twitter late on 30 April.
According to the announcement, Genesis, its parent company Digital Currency Group (DCG), the Unsecured Creditors Committee (UCC), and Gemini all agreed to a 30-day mediation process in court on Friday, following the request from Genesis earlier in the week. Although Gemini is “supportive of mediation”, the exchange noted there is a “need for urgency” for a final resolution to be reached “as soon as possible”.
In a Friday update, Gemini said the mediation will be “narrowly focused on DCG’s economic contribution to the bankruptcy estate”, and that the proposed process provided for two court meetings before 8 May. The exchange noted the importance of this date, as DCG owed $630 million to the bankruptcy estate by 9-11 May, and if it is unable to pay or restructure its debt “DCG risks defaulting on its obligations”.
Genesis had reached an “agreement in principle” with DCG, UCC, and Gemini back in February, which would have seen creditors recover an estimated 80% of their assets lost after the collapse of the crypto lender in November. A subset of creditors, however, walked away from the preliminary restructuring agreement last week, forcing Genesis to file a Motion for Mediation with the bankruptcy court on 25 April.
- Bankrupt crypto lender Genesis is trying to recover around $500 million from DCG, and another 4,550.5 BTC from DCGI, which it had loaned to the two companies in 2022.
- Both DCG and DCGI requested that the debts were converted to open loans on 9 May, but Genesis declined both offers and demanded the repayment of the loans with interest.
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- The U.S. Department of Justice has expressed its concerns over Sam Bankman-Fried’s seven expert witnesses, and requested they be barred from testifying on the case.
- The DoJ claimed most of the proposed experts lacked the necessary foundation for their opinions, making them unqualified to be an expert witness.
- The bankrupt crypto lender has agreed on a settlement with its Series B holders on how to distribute the $25 million from the sale of self-custody platform GK8.
- The majority of funds, $24 million, will be allocated for legal expenses, while the remaining $1 million will be distributed between the Series B holders.