Crypto lender Genesis Global has secured a 30-day mediation period with its creditors and other parties, pending the appointment of a mediator, lawyers for the bankrupt firm said during a hearing on Friday.
The move follows Genesis’ request earlier in the week to a US bankruptcy court to appoint a mediator to help determine the terms and conditions of owner Digital Currency Group’s (DCG) contribution to the debtors’ reorganisation plan.
DCG, which also owns CoinDesk, said that the request reflected a decision by a subset of creditors to walk away from a previous agreement. After the collapse of FTX last November, Genesis’ lending arm stopped withdrawals and the company later filed for bankruptcy protection.
In February, a lawyer for Genesis said DCG was seeking to sell the firm’s crypto lending and trading platform.
The appointment of a mediator is seen as a positive step in the bankruptcy proceedings, which could lead to a resolution that satisfies all parties involved. It is expected that the mediator will assist in negotiations between Genesis and its creditors, helping to create a reorganisation plan that is acceptable to both parties.
The crypto lending and trading platform market has been highly competitive in recent years, with a number of new players entering the space. However, the collapse of FTX and the subsequent bankruptcy of Genesis has raised concerns about the stability of the market, and many investors are now looking for reassurance that their investments are safe.
The appointment of a mediator is therefore a welcome development, as it suggests that Genesis and its creditors are willing to work together to find a solution that is in the best interests of all parties involved.
It remains to be seen whether a reorganisation plan can be agreed upon within the 30-day mediation period, but the appointment of a mediator is a positive step towards resolving this complex and challenging situation.
