Genesis creditors reject bankruptcy settlement, halt proceedings
A group of Genesis Capital’s creditors have “reneged” on a bankruptcy settlement deal agreed upon in February, according to a Twitter statement by parent company Digital Currency Group (DCG).
The creditors have demanded new settlement details that will delay court proceedings, according to DCG. “More than two months after all parties agreed to a comprehensive settlement that was submitted by Genesis Capital to the bankruptcy court, a group of Genesis Capital’s creditors have reneged and raised all new demands,” the tweet read.
“We do not know if the hundreds of thousands of individual creditors are aware of this development, but the latest maneuver will prolong the court process.”
Genesis filed for bankruptcy protection back in January, after the collapse of hedge fund Three Arrows Capital and crypto exchange FTX deeply impacted its ability to survive. Genesis now owes over $3.6 billion to its top 50 creditors, including Gemini. Its founders, the Winklevoss twins, previously threatened to sue DCG in regards to over $900 million lost to Genesis.
Read more: Genesis files for chapter 11 bankruptcy as Winklevii threaten DCG lawsuit
These new undisclosed demands by creditors are likely to shake the faith of others, many of whom have already decided that a bankruptcy deal for Genesis wasn’t worth banking on.
In February, Protos reported that some Genesis creditors decided to sell their claims. Stephen Sokolowski, a crypto mining executive, sold his $4 million claim against Genesis for just $1 million, or $0.25 on the dollar, to a fund managed by investment bank Jeffries.
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