A seven-member committee has been appointed to represent the interests of unsecured creditors in the Genesis Global bankruptcy case, according to court filings on Feb. 4.Â
The committee will represent the creditors in court, having the right to be consulted before major decisions and to participate in the reorganization plan. Members are generally selected from a list of the 20 largest unsecured creditors.
Among the chosen members are Mirana Asset Management – an arm of crypto exchange Bybit – SOF International, Digital Finance Group and crypto exchange Bitvavo, along with three individual creditors, Amelia Alvarez, Richard Weston and Teddy Andre Amadeo Goriss.
The group was appointed by William Harrington, a representative for the United States Trustee – an executive branch agency within the Justice Department responsible for monitoring bankruptcy cases. Forming a creditor committee is an important step in bankruptcy proceedings.
Related:Â Genesis Capital’s fall might transform crypto lending – not bury it
With over $290 million exposure, Bitvavo sits among the biggest creditors, followed by Mirana with $150 million and $37 million from Digital Finance Group.
Genesis Global Holdings and its lending business subsidiaries, Genesis Global Capital and Genesis Asia Pacific – collectively known as Genesis Capital, filed for bankruptcy on Jan. 19, citing liabilities up to $10 billion.
The companies sought relief under Chapter 11 two months after disclosing liquidity issues due to the collapse of the crypto exchange FTX. Withdrawals have been suspended from Genesis Global Capital’s platform since Nov. 16, 2022
On Jan. 24, a group of creditors filed a securities class-action lawsuit against Genesis’s parent company, the Digital Currency Group and its founder and CEO, Barry Silbert, alleging violations of federal securities laws.
The lawsuit claims that Genesis committed securities fraud through a scheme to defraud potential and existing digital asset lenders by making false and misleading statements. In the plaintiffs’ view, Genesis intentionally misrepresented its financial condition in violation of the United States Securities Exchange Act section 10(b).