Genesis Bankruptcy Proceedings May be Prolonged, Here’s Why [Updated]

The bankruptcy proceedings of Genesis Global, one of the subsidiaries of the Digital Currency Group (DCG) may be prolonged much further, the company said in a statement shared earlier today. According to the embattled firm, the bankruptcy proceedings agreed on about 2 months ago have been rejected by a group of unnamed creditors.

According to the company, it has not been able to fully comprehend the reasons behind why the creditors backed up from the previous agreement but it revealed that the process may not be concluded in due time as might be envisaged.

“More than two months after all parties agreed to a comprehensive settlement that was submitted by Genesis Capital to the bankruptcy court, a group of Genesis Capital’s creditors have reneged and raised all new demands,” the DCG statement reads, “We do not know if the hundreds of thousands of individual creditors are aware of this development, but the latest maneuver will prolong the court process.”

Genesis filed for bankruptcy in January featuring entities involved in its lending operations. The filing places the firm as one of the firms that faced frontline casualties from the collapse of major hedge fund Three Arrows Capital (3AC) as well as FTX Derivatives Exchange. While the company was placed on life support following 3AC’s support, the frailty in its finances became evident when FTX filed for bankruptcy last November.

Genesis is Committed to Finding a Solution

According to the statement shared, the company is still very committed to finding a speedy solution to repay all of its creditors. Part of the earlier agreement reached with its creditors earlier in the year was to liquidate some of the assets of the company in order to repay a significant part of its current debt.

Genesis is currently owing the sum of $3.6 billion to the top 50 creditors chief of whom is Gemini exchange which has a claim of about $900 million belonging to its previous Earn customers.

While the new course of action remains obscure following the rejection of the earlier plan, Genesis said it “committed to reaching a fair outcome for all and while we look forward to a constructive mediation process, we will have to weigh any new demands against the concessions we’ve previously made.”