The settlement is likely to be beneficial for many Genesis Global creditors. Will Gemini receive the $1 billion that Genesis has held?
In the most recent development, two insolvent companies, cryptocurrency exchange FTX and cryptocurrency lender Genesis Global, have teamed up to settle a dispute on the Chapter 11 bankruptcy cases.
FTX, a defunct cryptocurrency exchange, first asserted that Genesis, a crypto lender, owed them up to $3.9 billion, but Genesis rejected this. Later, the sum in question was lowered to a maximum of $2 billion.
Also Read: FTX Claims Portal Opens, Enabling Creditors To File Their Claims
In a letter to the bankruptcy judge on Thursday, July 27, the attorneys stated that the agreement will resolve both parties’ claims against each other. The agreement will be submitted for bankruptcy court approval. The letter, however, made no mention of the settlement’s contents.
Additionally, the settlement is likely to provide comfort to many of Genesis‘ creditors. Both parties feared that the disagreement could lead to delays in the bankruptcy process and the payment of claims.
According to the attorneys of both companies, they plan to “promptly document the Settlement and file a motion under Federal Rule of Bankruptcy Procedure 9019(a) for entry of an order approving the Settlement in their respective courts.”
Genesis Bankruptcy and Dispute with Gemini
In January, Genesis filed for Chapter 11 bankruptcy in New York. This decision was made after incurring financial losses as a result of the failures of Two Crypto Hedge Funds, Three Arrows Capital and FTX, the previous year.
Additionally, Genesis and cryptocurrency exchange Gemini are at odds, with Gemini asserting that Genesis holds more than $1 billion in customer deposits. After all attempts at negotiation fell through, Gemini sued Genesis for allegedly defrauding creditors and neglecting to repay their money.
Also Read: Genesis Bankruptcy: A Warning for the Crypto Industry.
Gemini co-founder Cameron Winklevoss stated in their petition that they were initially prepared to discontinue their Earn product in October 2022. Barry Silbert persuaded them to go ahead with it despite being aware of Genesis’ serious financial difficulties.
The Winklevoss twin said Silbert lied despite multiple apparent shortcomings in Genesis’s financial reports.