A group of Genesis creditors rejected the February-approved restructuring deal for the cryptolending platform and pressed for new terms. The parent company, DCG said.
DCG Statement on Genesis filing Motion for Mediation: pic.twitter.com/pRluUnL49C
— Digital Currency Group (@DCGco) April 25, 2023
“We don’t know whether hundreds of thousands of individual creditors are aware of such a turn of events, but the latest maneuver will prolong the legal proceedings,” the company said.
The February deal envisaged a gradual write-down of Genesis’s loan portfolio and the sale of insolvent structures.
The terms also include refinancing outstanding loans that DCG obtained from its subsidiary, amounting to about $500 million in fiat and about $100 million in Bitcoin.
“DCG remains committed to achieving a fair outcome for all. We expect a constructive mediation process, but we will have to weigh any new demands against the concessions we have already made,” the company warned.
On November 16, 2022, the cryptolending platform Genesis Global Capital froze withdrawals and the issuance of new loans. The firm cited heightened client demand following the FTX collapse.
In January 2023, Genesis Global Holdco and its subsidiaries Genesis Asia Pacific and Genesis Global Capital filed for bankruptcy. According to media reports, their liabilities exceed $3 billion.
Earlier in 2023, the DCG-backed cryptocurrency exchange Luno announced a 35% staff reduction.