- According to Sean O’Neal, a lawyer for bankrupt crypto lender Genesis, mediation has been postponed one final time.
- If the parties to the mediation cannot agree by August 16, Genesis will proceed with its current bankruptcy plan.
- The prolonged mediation is preventing Genesis from ending its time in bankruptcy, said O’Neal.
Bankrupt crypto lender Genesis has extended its mediations with creditors for the last time, a company lawyer said during a hearing on Wednesday. The crypto lender will move forward with its existing bankruptcy plan if the parties don’t come to a deal by August 16, according to Bloomberg.
Sean O’Neal, Genesis’ lawyer, told US Bankruptcy Judge Sean Lane that if there isn’t any substantial progress concerning a deal in principle in the next two weeks, they won’t be seeking to extend the mediation further. The mediation is one of the obstacles preventing Genesis from wrapping up its time in bankruptcy, according to O’Neal.
Genesis has been in mediation with key stakeholders, including parent company Digital Currency Group (DCG) and Gemini, since May. The official committee of unsecured creditors rejected a proposed bankruptcy exit plan supported by DCG, despite their best efforts to do so. Digital Currency Group is a venture capital company focusing on the digital currency market.
“At a certain point, we need to move forward,” said O’Neal. He said during a hearing that the parties are “very close” to a deal, but acknowledged he has said that before.
Genesis filed for bankruptcy on January 20, after it had been charged by the Securities and Exchange Commission (SEC) for selling unregistered securities. Moreover, the collapse of the crypto exchange FTX affected the crypto lender. As FTX declared bankruptcy, Genesis was revealed to be the largest unsecured creditor of the exchange and its affiliates, with an outstanding debt of $226 million.
Judge Lane issued an order on May 1 to begin a 30-day mediation process for the contribution that DCG and its affiliates must make. The order was directed to DCG, Genesis, and the American cryptocurrency exchange Gemini Trust. Genesis’ Unsecured Creditors Committee (UCC) and the Ad Hoc Group of Creditors were also participating.
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