Troubled digital currency firm Genesis Capital found its settlement disrupted by creditors two months after it initially struck a deal, raising concerns about the timing of the process.
Genesis 'Parent Company, Digital Currency Group (DCG), Posted A Statement on Twitter on April 25 Regarding Genesis' S Motion to MediaTe. ULD RUN Into Troud Because of New Demands From Creditors, The Company Said. In February, Genesis Filed A Comprehensive settlement with DCG and its creditors after reaching an "agreement in principle" with DCG and its creditors. Under the original settlement plan, Genesis creditors were expected to recover 80% of the money lost in bankruptcy.
Months later, Genesis creditors filed their demands, severely disrupting ongoing court proceedings, according to DCG. "It is difficult to understand why, given the limited participation of Genesis creditors since court filings in February, but our understanding is that some creditors have decided to walk away from the prior agreement," DCG wrote.
The DCG noted that it remained committed to reaching a fair settlement for all and must consider any new demands on previous concessions. The company stated: "We don't know if the hundreds of thousands of individual creditors are aware of this development, but this latest move will prolong the court process."
As previously reported, Genesis filed for Chapter 11 bankruptcy protection in January 2023 in the Southern District of New York. In the filing, the company estimated liabilities between $1 billion and $10 billion, with assets in the same range. Genesis is one of s ever companies hit by a massive liquidity crisis in the cryptocurrency market, sparked by the collapse of exchange FTX. Other troubled cryptocurrency firms include cryptocurrency lender Celsius, cryptocurrency exchange Gemini owned by Tyler and Cameron Winklevoss, cryptocurrency g roup Three Arrows Capital, and others.
