FTX Trading Ltd. and its affiliates, major creditors of bankrupt crypto lender Genesis Global Holdco, are not entirely satisfied with extending settlement talks through court mediation. So what’s behind this escalating drama?
Invitation not received: FTX expresses its displeasure
Claiming major credit to Genesis, FTX announced that it was kicked out of the court mediation held in May. This mediation involved Genesis, Digital Currency Group (its parent company) and other creditors like Gemini Trust Co.
The recent Genesis filing threw FTX on a curve ball, estimating its unliquidated claims at zero, while FTX claims a staggering $3.9 billion. Genesis argues that the dismissal of FTX’s claims is essential for a speedy distribution of creditors and a speedy confirmation of Chapter 11. Could this fight throw a wrench in the settlement process?
The mediation puzzle: adding more pieces
FTX’s objection adds another layer of complexity to the ongoing settlement saga involving DCG, Genesis and its creditors. Genesis’ intention to extend talks until June 16 has been met with opposition from FTX and several other creditors.
FTX argues that its exclusion renders the mediation process pointless, calling it a “waste of real estate resources.” So, should the process proceed without FTX’s involvement, or is this litigation an insurmountable hurdle?
A cry of progress from frustrated creditors
The delay in reaching a final settlement agreement is testing the patience of creditors. With Genesis filing for bankruptcy in January, individual creditors are increasingly wary of the protracted mediation process. Are these delays merely delaying tactics?
Amid the uncertain progress of mediated settlement talks, Gemini and DCG began to develop alternative strategies. As DCG seeks additional financing, Gemini is working with key creditors for a possible reorganization plan. But can these plans save the day if mediation fails?
Legal professions: SEC lawsuit adds to the chaos
Genesis and Gemini, facing an SEC lawsuit over the “Earn” program, recently filed for dismissal. But with hundreds of thousands of Gemini customers demanding a return of some $900 million, what impact will this legal battle have on ongoing mediation efforts?
As we watch this high-stakes drama unfold, it’s clear that the path to resolution is far from easy. One thing is for sure – the conclusion will be a landmark moment in the crypto world, potentially reshaping the landscape for crypto lenders.
Also read – Crypto Giant’s Revenge: SEC vs Gemini! Shocking stakes!