Bankrupt crypto lender Genesis Global Trading and its creditors have agreed to the appointment of a mediator.
According to a report from CoinDesk, Genesis’ lawyers said in a Friday court hearing that the firm’s creditors had agreed to the 30-day mediation period following a request made earlier that week to the U.S. Bankruptcy court for the appointment of a mediator.
On April 25, Genesis petitioned the court to schedule the mediation immediately owing to the fact that its parent company Digital Currency Group (DCG) owes the firm $630 million in fixed term loans. This debt obligation falls due in the second week of May, and DCG risks defaulting if there is now resolution in place by that time.
DCG attributed Genesis’ request for a mediator to a “subset of creditors” that reneged on the terms of a deal that was finalized in February. Under the initial agreement, Genesis had agreed to wind down its loan book, sell assets and refinance outstanding loans to pay back its creditors.
One of these creditors is the Winklevoss-owned crypto exchange Gemini, that has formed its own creditor committee to negotiate terms for the return of assets that Genesis owes customers of Gemini Earn.
In a statement on Sunday, Gemini said it was supportive of the mediation, albeit frustrated with the pace of progress and the need for urgency.
2/ Gemini is supportive of mediation and working with the parties to bring this to a conclusion. We have also expressed our frustration on the record on the pace of progress among the parties and the need for urgency. The next status conference with the Court will be on May 4th.
— Gemini (@Gemini) April 30, 2023
The revised terms presented by Genesis’ Unsecured Creditor Committee (UCC) was a result of the committee’s investigation into the various intercompany loans between Genesis entities and DCG before the crypto lender halted withdrawals, said Gemini in an update posted to its website.
“The mediation will be narrowly focused on DCG’s economic contribution to the bankruptcy estate for the benefit of all creditors, including Earn users, and is designed to bring resolution to the Genesis bankruptcy plan,” said Genesis.