DCG settlement with Genesis still undecided as 30-day mediation period proceeds

Digital Currency Group (DCG), the parent company of crypto firm Genesis Capital, has reported no solution to its “outstanding intercompany obligations” that could help reimburse creditors.

In a May 9 announcement, DCG said it was in the middle of a 30-day mediation period with Genesis in response to creditor demands. The firm proposed a settlement plan in February in which Genesis creditors had been expected to receive 80% recovery of funds after the firm filed for Chapter 11 bankruptcy. 

However, in April Genesis creditors raised their demands, disrupting the bankruptcy proceedings and the “agreement in principle” between the two firms. Genesis reported it had between $1 billion and $10 billion in liabilities when filing for bankruptcy.

“On a parallel path and to provide further financial flexibility, DCG is in discussions with capital providers for growth capital and to refinance its outstanding intercompany obligations with Genesis,” said DCG. “We are committed to reaching a fair outcome for all and look forward to a productive resolution during this mediation period.”

In the wake of Genesis’ bankruptcy, the troubled crypto firm has often been at the center of legal issues between DCG and crypto exchange Gemini. DCG and Genesis reportedly owed roughly $900 million to Gemini’s clients locked out of their Earn funds – Genesis operated the program in partnership with Gemini. In January, Gemini co-founder Cameron Winklevoss threatened to file a lawsuit against DCG and CEO Barry Silbert if they couldn’t offer Gemini creditors “a fair deal.”

Related: Gemini ‘supportive’ of Genesis mediation, but frustrated over pacing

U.S. authorities have also taken action amid the businesses’ financial troubles. In January, the Securities and Exchange Commission charged Genesis and Gemini with offering unregistered securities, and the New York State Department of Financial Services was also reportedly investigating Gemini over its Earn program.

The 30-day meditation period gives DCG and Genesis until the end of May to come to resolution on the proposed restructuring plan. In its initial Chapter 11 filing, Genesis said it planned to sell its assets at auction and exit bankruptcy on May 19.

Magazine: Get your money back: The weird world of crypto litigation

All Dutch and English crypto news!

Je bent nog op tijd, want dit is wanneer Bitcoin echt gaat knallen

Het universum kent veel onbeantwoorde vragen: waar komt het leven vandaan? Waar speelt Xavi Simmons volgend jaar? Ben ik nog op tijd om Bitcoin te...

Is Biden’s controversial Bitcoin mining tax dead or set to rise from the ashes?

Bitcoin (BTC) miners in the United States can breathe a sigh of relief after a proposed tax on crypto mining did not make it into...

Crypto analyse: Bitcoin maakt eerste rode candle van het jaar en vervolgt weg naar beneden

Drie dagen geleden is de maandelijkse candle van Bitcoin gesloten. In deze analyse werpen we een blik op het effect van deze candle op het...

Weekendcolumn: Hoe overtuig je de massa van Bitcoin?

Wat is de beste manier om de massa te overtuigen? Om duidelijk te maken wat voor een impact Bitcoin zal gaan maken! Deze vraag houdt...

Beste exchanges

Koop je crypto bij Bitvavo