Crypto Lender Genesis Optimistic About Its Ability To Resolve Disputes With Creditors | Crypto

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Genesis filed for bankruptcy protection on Jan. 19 after previously freezing customer withdrawals.

An attorney for insolvent Genesis Global Capital says the cryptocurrency lender is confident it can resolve its disputes with creditors this week, in a bid to emerge from Chapter 11 bankruptcy protection. here at the end of May.

Sean ONeal, the attorney, spoke at an initial hearing in Manhattan bankruptcy court for Genesis Global Capital, the crypto lending firm owned by venture capital firm Barry Silberts Digital Currency Group.

Genesis and two loan units filed for bankruptcy protection against creditors on January 19, two months after they froze customer withdrawals following the collapse of the Sam Bankman-Frieds FTX exchange.

The filing follows the bankruptcies since last July of crypto lenders Celsius Network, Voyager Digital and BlockFi.

ONeal said Genesis has some confidence that it will resolve its differences with its creditors this week, after about two months of negotiations, and will seek mediation if necessary.

Sitting here right now, I don’t think we’re going to need a mediator, he said. I am very optimistic.

Brian Rosen, creditors’ attorney holding $1.5 billion in claims, said we are getting closer to a deal.

US Bankruptcy Judge Sean Lane granted a series of day one motions for Genesis, including to pay critical employees and suppliers, which is common in bankruptcy cases.

Citing customer privacy interests, Lane also said Genesis did not have to reveal customer names in its creditor lists and suggested warning him about possible phishing scams if their names were made public later. .

Genesis has announced plans to auction off various assets and emerge from bankruptcy by May 19.

The company reported just over $5 billion in assets and liabilities and said it owed at least $3.4 billion to more than 100,000 creditors. He estimated he had nearly $1.7 billion in claims against his parent company.

The Genesis bankruptcy does not include DCG, Genesis derivatives and cash trading, custody and brokerage businesses. DCG also controls asset manager Grayscale and news service CoinDesk.

Genesis’ troubles have brought Silbert into conflict with former US Olympic rowers and identical twins Cameron and Tyler Winklevoss, who run crypto exchange Gemini, which owes Genesis $765.9 million and is its biggest creditor.

On January 12, the United States Securities and Exchange Commission charged Genesis and Gemini with illegally selling unregistered securities through their Gemini Earn lending product.

The Winklevosses said Genesis should repay the $900 million in assets owed to Earn’s approximately 340,000 investors, and Cameron Winklevoss called for Silberts’ withdrawal.

Chris Marcus, an attorney for Gemini and other creditors, told Lane there was work to be done to get everyone on the same page, but he was cautiously optimistic the disputes could be resolved without a mediator.

Genesis borrowers also include hedge fund Three Arrows Capital and Alameda Research, a trading firm affiliated with FTX, a person familiar with the matter said last week.

Three Arrows and Alameda are also in bankruptcy proceedings.

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