3 - 5 minute read
Digital currency company Genesis Capital’s settlement has been disrupted by creditors just two months after reaching an initial agreement. This has raised concerns about the timing of the process. Genesis Capital’s parent company, Digital Currency Group (DCG), took to Twitter on April 25 to issue a statement on Genesis filing a motion for mediation. The firm stated that Genesis’ settlement could be troubled due to renewed demands from creditors.
In February, Genesis Capital submitted a comprehensive settlement to the bankruptcy court after reaching an “agreement in principle” with DCG and its creditors. Under the proposed restructuring plan, Genesis creditors were expected to receive 80% recovery of funds lost due to the firm’s collapsed operations. However, a few months later, Genesis creditors eventually raised their demands, significantly disrupting the ongoing court process, according to DCG.
“While it is difficult to understand the rationale given the limited engagement from Genesis creditors since the February court filing, our understanding is that a subset of creditors have decided to walk away from the prior agreement,” DCG wrote. The latest maneuver will prolong the court process, and it remains unclear if the hundreds of thousands of individual creditors are aware of this development.
DCG Statement on Genesis filing Motion for Mediation: pic.twitter.com/pRluUnL49C
— Digital Currency Group (@DCGco) April 25, 2023
Genesis is one of several companies that were hit by a massive liquidity crisis in the cryptocurrency market, triggered by the exchange FTX’s collapse. Other troubled crypto firms include Celsius, Gemini, Three Arrows Capital, and others.
This news could lead to increased uncertainty for traders in the cryptocurrency market, especially those who have investments in Genesis Capital. Traders need to keep an eye on the ongoing court process and any new developments that may arise. It is unclear how long the court process will be prolonged, which could lead to increased volatility in the market.
Traders should remain cautious and not make any hasty decisions based on this news. It is essential to do thorough research and consider all factors before making any investment decisions. Traders should also diversify their portfolios to minimize the impact of any negative news on a particular asset.
The Bottom Line
The disruption of Genesis Capital’s settlement by creditors highlights the ongoing challenges faced by cryptocurrency companies in the current market. Traders need to remain vigilant and keep a close eye on any developments that may impact their investments. It is crucial to have a diversified portfolio and not make any hasty decisions based on short-term news.
