April 19, 2024
Genesis' Bankruptcy Plan Overhaul Amid Legal Heat
Latest Cryptocurrency News

Significant Turn in Genesis’ Bankruptcy Plan Amid NYAG Legal Action

The U.S. government highlighted a substantial shift in the bankruptcy proceedings of Genesis, a crypto lender, stating that their updated bankruptcy plan represents a significant departure from the initial strategy.

This new plan, aiming at asset liquidation instead of reorganization, follows legal action taken by the New York Attorney General (NYAG) against Genesis and its parent company, Digital Currency Group (DCG). This significant alteration, noted by U.S. Trustee William Harrington, diverges from the prior plan to sell assets and reorganize unsold ones for the benefit of creditors. Harrington, an official from the Department of Justice responsible for overseeing bankruptcy cases, stressed the importance of the major modifications in the liquidation plan, highlighting the need for creditors to thoroughly assess and potentially approve these changes, potentially causing further delays in the wind-up process.

Since the initiation of the bankruptcy proceedings back in January, a significant stumbling block has been the treatment of the over $1.65 billion owed by DCG to Genesis. In a recent filing, Genesis indicated that a deal with DCG is no longer a viable option, following accusations by NYAG Letitia James of defrauding investors. All three companies involved—DCG, Genesis, and business partner Gemini—have adamantly refuted James’ allegations.

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