Genesis’ New Liquidation Plan Is a Material Swerve, U.S. Government Says

The bankrupt crypto lender appears to be no longer seeking to reorganize, after a lawsuit from the New York Attorney General dimmed hopes of a deal with parent company DCG.

AccessTimeIconNov 2, 2023 at 8:44 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now
  • Genesis is now focused on liquidation after making material changes to its bankruptcy plans last week, the U.S. government has said.
  • The change threatens to delay bankruptcy proceedings further.

An updated bankruptcy plan filed by crypto lender Genesis last week represents a significant change of plans, the U.S. government said in a filing on Wednesday. The lender is now seeking to liquidate its assets rather than reorganize them.

The apparent U-turn by Genesis – made after the crypto lender and its parent company Digital Currency Group (DCG) were sued by the New York Attorney General (NYAG) – could add extra delays to the wind-up process, the filing by U.S Trustee William Harrington said. DCG is also CoinDesk’s parent company.

“The prior plan provided for the sale of assets of the debtors and a non-debtor affiliate, a discharge of the debtors, and the reorganization of any unsold assets for the benefit of the claim holders,” said Harrington, a Department of Justice official with responsibility for bankruptcy cases. “The liquidating plan provides for the liquidation of all three debtors … the debtors have substantially and materially modified the sale plan.”

Harrington argued creditors will need more time to digest the impact of the significant changes made on Oct. 24 before deciding whether to approve them in a vote.

The bankruptcy, which commenced in January, has stumbled over how to treat over $1.65 billion Genesis is owed by DCG. In a filing made last week, Genesis said a DCG deal is now “not a viable route” after NYAG Letitia James accused DCG, Genesis and business partner Gemini of defrauding investors.

The three companies have all denied James’ charges. A spokesperson for Genesis did not immediately respond to a request for comment on the latest filing.

Edited by Parikshit Mishra.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.

Jack Schickler

Jack Schickler was a CoinDesk reporter focused on crypto regulations, based in Brussels, Belgium. He doesn’t own any crypto.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.


Read more about