Chapter 11 proceedings begin for Genesis, the crypto loan and liquidity intermediary in crisis for a few weeks and which has launched the aforementioned bankruptcy and creditor protection mechanisms, mechanisms that do not always lead to bankruptcy, however, of the company that requests it. And this would seem to be the case for Genesis, which aims to return to normal conditions for next May and which, according to one of the lawyers who are following it, could find an agreement with creditors as early as this week.
A piece of news that has not circulated much – at least in relation to the potential relevance of the fact – and which we will analyze to understand how much of it is true, how much it is wishful thinking, and how much it could also impact the cryptocurrency market.
The situation is a complex one. Although Genesis seems to have only short-term problems, or rather, that unlike many other companies we have seen fail in the crypto sector in 2022, it has substances to appeal to.
We are facing the umpteenth ripple effect that started from Terra Luna and ended, it was hoped, with FTX. A chain effect which, however, also ended up affecting one of the operating arms of the Digital Currency Group, which is precisely the parent company of Genesis.
With the launch of the Chapter 11 procedures, procedures that in the short term protect against the onslaught of creditors and which aim, where possible, to find a sort of agreement with them and a possible restructuring plan, we finally have the first results. And, we quote off the cuff one of the lawyers who is following the case, even a moderate optimism.
Again according to the aforementioned lawyer, the agreement with the creditors could already be reached this week, with negotiations already on the table for a restructuring plan for the company.
We will have to see what the response will be from those who are representing 1.5 billion dollars for individuals, often with small economic possibilities, in approving this plan.
Another news comes from Genesis’ lawyers, which if it were also confirmed by creditors would mean a relatively rapid exit from the crisis. That is the possibility that a mediator is not used, and that therefore the restructuring plan is good enough to meet the favors of creditors.
Among them, of course, Gemini, which has about 900 million locked, owned by its users of the Earn plan. A disaster which, again according to Gemini, would have led the company to cut 10% of its personnel, which obviously raised more than a few eyebrows among the more circumspect. Why yes, Gemini has responsibilities in what happened which, at least in the opinion of the writer, should not be downloaded completely on Genesis, although this company is the most at fault.