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.
- The IRS filed its claims against FTX under the “Admin Priority” classification, which could allow it to supersede the claims of other creditors in the bankruptcy case.
- The largest of the claims is against Alameda Research LLC, with the IRS claiming around $20 billion in partnership taxes and close to $400 million in payroll taxes.
Former CEO of FTX Sam Bankman-Fried leaves the Federal Court in New York after pleading not guilty, 3 January, 2022.
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- The cryptocurrency exchange is estimated to have more than 100,000 creditors, and between $500 million and $1 billion in both assets and liabilities.
- The Chapter 11 filing came less than a month after the U.S. SEC filed charges against Bittrex and its former CEO, claiming they were operating an unregistered securities exchange.
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- The platform will not be available to retail customers “at this time”, and will initially provide trading of only BTC and ETH perpetual futures, settled in the USDC stablecoin.