A lawyer for bankrupt crypto lending firm Genesis is optimistic the firm can resolve its creditor disputes as early as this week, and the company could come out of Chapter 11 proceedings by late May.
Genesis filed for Chapter 11 bankruptcy on Jan. 19. At the time it already had a restructuring plan along with a path pursuing a “sale, capital raise, and/or an equitization transaction” so it could potentially “emerge under new ownership.”
The bankruptcy comes nearly two months after Genesis suspended withdrawals in November 2022, citing market turbulence caused by the bankruptcy of crypto exchange FTX.
A series of “first-day” motions, standard in bankruptcy proceedings, were granted by Judge Sean Lane to Genesis which included allowing the firm to pay employees and vendors.
Genesis said it will sell its assets at auction on May 19, with a plan to exit bankruptcy in a little under four months. It reported having just over $5 billion in assets and liabilities and owing over 100,000 creditors at least $3.4 billion.
Genesis’ withdrawal suspension last year impacted users of a yield-bearing product it managed called “Earn” from the Gemini exchange.
Its largest debtor was its parent company, Digital Currency Group (DCG), which owes Genesis around $1.65 billion inclusive of $575 million of loans due in May and a $1.1 promissory note maturing in 10 years’ time.