Crypto lender platform Genesis has agreed to participate in a 30-day mediation process, according to attorney Sean O’Neal, who is representing the company. The mediation process will involve Genesis committing to its unsecured creditors. This decision comes after the company’s proposed restructuring agreement faced opposition from the committee.
To address the concerns raised, Genesis has scheduled two mediation meetings before May 8 to reach a mutually agreeable solution. After completing the mediation process, Genesis plans to disclose the agreement’s specifics to the public.
Earlier this week, Genesis requested permission from authorities to appoint a mediator, to negotiate the terms and conditions of Digital Currency Group’s contribution to the debtors’ restructuring plan. The owner of Genesis, Digital Currency Group, will be involved in the mediation process.
Creditors on the Genesis platform have reportedly withdrawn from a previous agreement due to their dissatisfaction with Digital Currency Group (DCG), the parent company of Genesis, and its contribution to the restructuring plan. This withdrawal comes as Genesis faces outstanding obligations of almost $3.4 billion, with $2.4 billion owed to its principal creditors.
In March, Genesis notified its top creditors about the amount owed and the auction date, with a deadline for creditors to request their owed amount set for May 22 and the auction scheduled for June 27. Interested bidders must submit their request by May 5. On January 19, 2023, Genesis filed for bankruptcy protection, limited to its lending arm. However, the rest of the company continues to operate without any disruption.
While the news of bankruptcy may cause concern among the customers of the lending arm, the fact that the other services of Genesis remain functional should provide reassurance. This demonstrates the resilience and strength of Genesis’s overall business model, as only one division has been impacted.