Are Genesis and it’s parent DCG, trying to pull a fast one on their creditors?
If you’re curious about the fate of Genesis, the crypto lending platform that went bust in January, you might be feeling frustrated.
So are some of its biggest creditors, who are not happy with the way Genesis is handling its bankruptcy.
They claim that Genesis is offering them a raw deal that leaves them in the lurch.
According to a CoinDesk report, Gemini and the Fair Deal Group, a coalition of creditors, filed their objections on Wednesday.
Gemini joined other creditor groups in objecting to Genesis' proposed agreement to work out bankruptcy issues, saying there were not enough details provided.@nikhileshde reportshttps://t.co/E6q97eCY09
— CoinDesk (@CoinDesk) August 30, 2023
They argued that Genesis’ proposed solution is too vague and does not give them enough bang for their buck.
They also pointed out that Genesis still has outstanding debts to other creditors that are not part of the deal. And they wondered whether Genesis can actually pull off a successful bankruptcy plan.
Gemini’s filing said: “The Debtors [Genesis] disclosed an ‘agreement in principle’ on August 29, 2023, that is based on a deal between the Debtors, the Committee [of unsecured creditors], and DCG [Digital Currency Group]. This deal is very sketchy and subject to final documentation. The limited information provided by the Debtors also reveals that the deal offers very little economic value.”
Genesis said in its filing on Aug. 29 that unsecured creditors could get up to 90% of their holdings in U.S. dollars, but it did not spill the beans on the full details.
Another group of creditors – the Ad Hoc Group of Genesis Lenders – also filed an objection earlier, saying that Digital Currency Group’s role is “not enough to pay even the undisputed loan amounts,” according to that group.
The three parties all want to stop a special period that gives Genesis exclusive rights to negotiate the terms of its bankruptcy through mediations.
They want to have more voice in how Genesis settles its debts.