- The original end date for the mediation session of May has been pushed out to June 16.
- Some of Genesis’ creditors were unhappy with the decision.
Due to rising concerns about the potential involvement of Genesis’ parent firm Digital Currency Group (DCG) in the lender’s reorganization, U.S. Bankruptcy Court Judge Sean Lane prolonged a mediation session between Genesis and its creditors during a Monday bankruptcy hearing.
The original end date for the mediation session of May has been pushed out to June 16. After prior negotiations between the bankrupt institution and its creditors failed earlier this year, on May 1 Judge Lane appointed a mediator to manage the proceedings.
The Judge stated:
“There’s lots of different kinds of conversations that have to happen in connection with [bankruptcies]. The challenge always, of course, is that you can’t negotiate everything all at once.”
Some of Genesis’ creditors, notably crypto exchange Gemini, were unhappy with the judge’s decision to prolong the mediation time. In January, Genesis filed a petition for bankruptcy in the Southern District of New York.
Attorneys for Gemini contended that individuals most negatively affected by the bankruptcy would be worse off if the parties involved in the case continued to negotiate for an extended period of time.
After Genesis ceased operations in November due to the multi-billion dollar collapse of one of its borrowers, cryptocurrency exchange FTX. Gemini, a centralized cryptocurrency exchange, blocked withdrawals from accounts related to its crypto lending product Gemini Earn.
Customers of Gemini Earn, who have also suffered as a consequence of Genesis’ financial troubles, spoke up during the hearing. They express their displeasure with the judge’s decision to prolong the mediation term.