As reported by the Reuters news agency on Monday, a lawyer for Genesis Global Capital, which has filed for bankruptcy, asserted that the cryptocurrency lender was optimistic about its ability to resolve its disputes with creditors this week, with an aim of emerging from Chapter 11 by the end of May.
Hopes for Rebirth
It was Sean O’Neal, the lawyer for Genesis Global Capital, which belongs to Barry Silbert’s venture capital firm Digital Currency Group, who appeared at an initial hearing in Manhattan bankruptcy court.
As a result of the collapse of Sam Bankman-Fried’s FTX exchange in the wake of Genesis’s bankruptcies, the company, along with two lending units, submitted a petition on Jan. 19, two months after it froze customer withdrawals.
Earlier this month, Celsius Network, Voyager Digital, and BlockFi filed for bankruptcy, following their bankruptcies last July. Following more than two months of negotiations, Genesis CEO O’Neal said it had “some measure of confidence” that its disputes with creditors would be resolved this week, and the company may seek mediation if that proves necessary.
There is no doubt that we are getting closer to an agreement, said Brian Rosen, an attorney representing creditors holding $1.5 billion in claims. It has recently been decided that U.S. Bankruptcy Judge Sean Lane will grant Genesis a series of “first-day” motions that include the payment of employees and critical vendors, which are common in bankruptcy proceedings.
According to Lane, Genesis will never be compelled to reveal its customers’ names to creditors, and Lane also suggested that Genesis warn about possible phishing scams should the names of the customers become public later in the future.
The Genesis Corporation recently announced it plans to sell various assets at auction, as well as exit bankruptcy by the 19th of May. The hope is not clear as to whether it will be realized, and the challenges are not as easy to overcome as people think.
In its annual report last year, the company reported assets and liabilities worth just over $5 billion and said that it owes at least $3.4 billion in debt to more than 100,000 creditors. Several billion dollars in claims are estimated to have been filed against its parent company by the firm.
This bankruptcy does not include DCG’s derivatives and spot trading, custody and brokerage businesses. Additionally, DCG controls Grayscale, a private equity firm that manages assets, and CoinDesk, a news agency.
