Gemini

A recent lawsuit initiated by the New York Attorney General’s Office (NYAG) could impact Genesis’ bankruptcy process, according to a <a href="https://www.reuters.com/legal/genesis-says-ny-ag-lawsuit-may-force-no-deal-bankruptcy-liquidation-2023-10-24/">Oct. 24</a> report from Reuters. 
Genesis plans to propose a “no deal” bankruptcy plan in response to actions taken by the NYAG, in which, instead of waiting for the lawsuit’s outcome, it would distribute available crypto assets to customers and establish a process to maintain litigation claims against DCG and others, as stated by Genesis attorney Sean O’Neal in a New York court hearing. 
The proposed “no deal” plan, if implemented, would likely result in diminished payouts for its users. However, this plan would shield these payouts from repercussions arising from the NYAG lawsuit. 
The New York regulator sued <a href="https://cryptoslate.com/companies/genesis/">Genesis Global</a>, its parent company <a href="https://cryptoslate.com/companies/digital-currency-group/">Digital Currency Group</a> (DCG), and its one-time partner <a href="https://cryptoslate.com/companies/gemini/">Gemini</a> on <a href="https://cryptoslate.com/gemini-claims-victim-status-in-nyags-billion-dollar-lawsuit/">Oct. 19</a>, alleging that the three companies committed a $1 billion fraud against customers through a lending program. It aims to have the companies pay an unspecified amount of damages and penalties and halt certain operations in New York. 
Separate from that lawsuit, Genesis’s bankruptcy proceedings have been ongoing since January. Early filings <a href="https://cryptoslate.com/genesis-owes-over-3-5b-to-top-50-creditors-owes-765-9m-to-gemini-earn-users/">indicate the company owes $3.5 billion</a> to its creditors, including $765 million to lending customers whose balances were previously locked. 
Alongside those bankruptcy proceedings, Genesis is attempting to recover assets, including <a href="https://www.bloomberg.com/news/articles/2023-09-06/bankrupt-genesis-sues-dcg-over-620-million-of-unpaid-loans#xj4y7vzkg">$620 million in unpaid loans</a> from its parent firm, DCG. According to Reuters, Genesis now intends to preserve its litigation against DCG but also plans to liquidate assets and repay users before reaching any deal with the parent company. 
<h2 id="bankruptcy-plan-hastened">Bankruptcy plan hastened</h2> 
O’Neal stated that the above course of action has been “forced” by the NYAG’s complaint, which presumably will impose further costs on the company. He added that the new plan is “not an easy decision” but “an obvious decision.” 
DCG, meanwhile, told Reuters that it will continue to take part in settlement talks. It said that it intends to defend itself and obtain a victory if it is forced into litigation. 
DCG nevertheless called litigation with Genesis a “failed resolution that will result in far lesser recoveries for creditors.” It is unclear whether an out-of-court settlement would be complete in time for Genesis’ hastened payout plan. 
The post <a rel="nofollow" href="https://cryptoslate.com/genesis-moves-for-early-bankruptcy-payouts-as-nyag-suit-applies-pressure/">Genesis moves for early bankruptcy payouts as NYAG suit applies pressure</a> appeared first on <a rel="nofollow" href="https://cryptoslate.com">CryptoSlate</a>.

Genesis moves for early bankruptcy payouts as NYAG suit applies pressure

Table of Contents

CryptoSlate

Other articles published on Oct 25, 2023

Blockchain E-Ticketing Platform UTIX Announces Major Exchange Listing On BitMart

Solana Price Prediction As Bulls Recover From FTX Losses; Will $SOL Hit $50?

TON Foundation and Mantle Network Form Strategic Alliance, Advancing EVM-Compatible Layer 2 Block...

Top Indicators of the CoinGecko Q3-2023 Report

Bitcoin Price Surges to $35,000, Triggering Major Crypto Exchange Outflows

VZ Stock Price Surges 9%; Correction Over in Verizon Stock?

Join our free newsletter for daily crypto updates!