Crypto exchange Gemini has objected to Genesis’ bankruptcy resolution proposal, claiming that the plan lacks necessary specifics and fails to offer adequate assurances to its major debtors.
Gemini has joined two other creditor groups in objecting to the proposed agreement.
As reported earlier, Digital Currency Group has reached an in-principle agreement with Genesis’ creditors.
Gemini had sued Barry Silbert and DCG for fraud after the digital conglomerate failed to make outstanding payments to Winklevoss’ owned crypto platform.
Gemini Claims Agreement Lacks Clarity
Gemini’s legal representatives argue that the presented “agreement in principle” between the involved parties, including Digital Currency Group (DCG), lacks the clarity needed for a successful resolution.
The objection filed by Gemini points out that the information provided by Genesis remains limited and highlights the agreement’s deficiencies in terms of both specifics and economic considerations.
Furthermore, the filing emphasizes that DCG has yet to address its outstanding loans to the tune of approximately $630 million that were due in May 2023.
Fair Deal Group and Ad Hoc Group Oppose Genesis’ Bankruptcy Resolution Proposal
This objection aligns with the sentiments expressed by another group of creditors known as the Fair Deal Group, who have raised similar concerns about the inadequacies of the proposed plan.
The group claims that the suggested agreement doesn’t secure all of Genesis’ debts comprehensively and raises doubts about the project’s ability to execute a viable plan.
In response to the objections, Genesis’ bankruptcy proceedings have faced challenges on multiple fronts.
The Ad Hoc Group of Genesis Lenders has also voiced its skepticism about the role of Digital Currency Group in the proposed resolution, considering it insufficient to address the creditor claims adequately.
These creditor groups have also called for an end to the exclusive negotiation period that allowed Genesis to mediate its bankruptcy terms.
They emphasize the repeated extensions sought by the debtors and their promises of a forthcoming resolution involving DCG.
The objections from Gemini and other creditor parties highlight the complexities surrounding Genesis’ bankruptcy proceedings.
As the cryptocurrency lender grapples with its financial troubles in the aftermath of the 2022 crypto downturn, creditor groups are demanding more transparent, comprehensive, and satisfactory terms to resolve the situation.
When FTX collapsed and filed for bankruptcy in November last year, its ripple effect was felt across the industry leading to several other major companies filing for bankruptcies.