Genesis’ New Liquidation Plan Is a Material Swerve, U.S. Government Says

CoinDeskPolicyPublicado em 2023-11-01Última atualização em 2023-11-02

Resumo

The bankrupt crypto lender appears to be no longer seeking to reorganize, after a lawsuit from the New York Attorney General dimmed hopes of a deal with parent company DCG.

  • Genesis is now focused on liquidation after making material changes to its bankruptcy plans last week, the U.S. government has said.
  • The change threatens to delay bankruptcy proceedings further.

An updated bankruptcy plan filed by crypto lender Genesis last week represents a significant change of plans, the U.S. government said in a filing on Wednesday. The lender is now seeking to liquidate its assets rather than reorganize them.

The apparent U-turn by Genesis – made after the crypto lender and its parent company Digital Currency Group (DCG) were sued by the New York Attorney General (NYAG) – could add extra delays to the wind-up process, the filing by U.S Trustee William Harrington said. DCG is also CoinDesk’s parent company.

“The prior plan provided for the sale of assets of the debtors and a non-debtor affiliate, a discharge of the debtors, and the reorganization of any unsold assets for the benefit of the claim holders,” said Harrington, a Department of Justice official with responsibility for bankruptcy cases. “The liquidating plan provides for the liquidation of all three debtors … the debtors have substantially and materially modified the sale plan.”

A D V E R T I S E M E N T
A D V E R T I S E M E N T

Harrington argued creditors will need more time to digest the impact of the significant changes made on Oct. 24 before deciding whether to approve them in a vote.

The bankruptcy, which commenced in January, has stumbled over how to treat over $1.65 billion Genesis is owed by DCG. In a filing made last week, Genesis said a DCG deal is now “not a viable route” after NYAG Letitia James accused DCG, Genesis and business partner Gemini of defrauding investors.

The three companies have all denied James’ charges. A spokesperson for Genesis did not immediately respond to a request for comment on the latest filing.

Edited by Parikshit Mishra.

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