24/7 Cryptocurrency News

Genesis Global Considers “No Deal” Bankruptcy Amid Legal Battle

Genesis Global is considering a 'no deal' bankruptcy amid a lawsuit by the NY Attorney General, jeopardizing a quick resolution.
Published by
Genesis Global Considers “No Deal” Bankruptcy Amid Legal Battle

In a significant development within the cryptocurrency space, Genesis Global, a leading crypto lender, is considering a “no deal” bankruptcy plan as it grapples with a civil fraud lawsuit filed by New York Attorney General Letitia James. According to Reuter’s report, the lawsuit, which also targets Genesis’s parent company, Digital Currency Group (DCG), and former partner Gemini Trust Co, alleges fraudulent activities that resulted in investor losses of over $1 billion through the Gemini Earn program.

Meanwhile, this move could lead to a complex legal showdown, jeopardizing the prospects of a swift resolution. Notably, Genesis Global filed for bankruptcy in January this year.

Advertisement

Challenges On Genesis Global

According to the latest report, Genesis Global, a prominent name in the crypto lending industry, has found itself at a crossroads. Notably, the New York Attorney General’s lawsuit has put the company in a precarious position, with potential bankruptcy liquidation looming on the horizon.

Notably, on October 19, Letitia James initiated a lawsuit against crypto firms Genesis Global, its parent company DCG, and former partner Gemini Trust Co, accusing them of defrauding investors with losses exceeding $1 billion via a jointly operated investment program known as Gemini Earn.

However, rather than wait for the lawsuit’s outcome, Genesis is considering an unconventional approach with a “no deal” bankruptcy plan. Meanwhile, this plan aims to distribute available crypto assets to its customers while preserving the right to pursue litigation claims against DCG and other entities.

Notably, the decision, according to Genesis attorney Sean O’Neal, is not taken lightly but is seen as the only viable option in response to the legal challenges presented by the Attorney General’s complaint.

Meanwhile, Genesis Global declared its exit from the crypto trading industry altogether in mid-September.

Also Read: Memecoin Rally Next? Shiba Inu and Dogecoin Gearing Up for the Uptrend

Advertisement

Creditor Interests and Legal Complexities

Genesis Global is mindful of its creditors and believes that a bankruptcy plan coupled with a DCG settlement would be in its best interest. However, time is running out for Genesis to finalize such a plan and present it for creditor approval. Meanwhile, DCG, the parent company under scrutiny, remains committed to exploring settlement negotiations.

According to the report, a spokesperson for DCG stated that they are fully prepared to defend against Genesis’s claims in court, emphasizing their confidence in a successful outcome. In addition, they argue that a litigation-based resolution would ultimately result in significantly lower recoveries for creditors.

Meanwhile, this legal battle adds a layer of complexity to the already intricate cryptocurrency landscape, where regulatory actions and investor protection are increasingly coming to the forefront. As Genesis Global navigates the tumultuous waters of litigation, the crypto community watches closely, awaiting a resolution that could set a precedent for the industry.

Notably, the outcome of this case may have lasting implications for how cryptocurrency firms interact with regulators and handle investor disputes in the future.

Also Read: Spot Bitcoin ETFs Can See $14 Billion Inflows in First Year

Advertisement

Share
Coingapestaff

CoinGape comprises an experienced team of native content writers and editors working round the clock to cover news globally and present news as a fact rather than an opinion. CoinGape writers and reporters contributed to this article.

Published by
Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Recent Posts

  • 24/7 Cryptocurrency News

Pi Network Mainnet to Get Major Upgrade in Q4, Says Expert

Over the past month, the Pi Network testnet has been actively testing the Protocol v23…

October 9, 2025
  • 24/7 Cryptocurrency News

Bitwise Solana ETF to Launch This Week as It Amends Staking, Fees? Bloomberg Weighs In

Bitwise Solana ETF (BSOL) is likely gearing up for launch this week as the issuer…

October 9, 2025
  • 24/7 Cryptocurrency News

Canary Capital Trump Coin ETF Secures DTCC Listing as Expert Predicts Price Breakout

Canary Capital’s Trump Coin ETF has been listed on the Depository Trust & Clearing Corporation…

October 9, 2025
  • 24/7 Cryptocurrency News

Polymarket Founder Shayne Coplan Teases Potential POLY Token After $2B ICE Deal

Polymarket founder Shayne Coplan has sparked speculation about a potential native token launch following a…

October 9, 2025
  • Bitcoin News

FOMC Minutes Signal Fed Open to More Rate Cuts This Year, Bitcoin Bounces

The FOMC minutes have signaled a dovish shift from the Fed officials, who look likely…

October 9, 2025
  • 24/7 Cryptocurrency News

North Dakota To Issue ‘Roughrider’ Stablecoin Following Wyoming’s Footsteps

North Dakota is set to become the second U.S. state to issue a stablecoin, named…

October 8, 2025