The U.S. Government Disapproves of Genesis’ Updated Bankruptcy Plan
The U.S. government is not in favor of the updated bankruptcy plan submitted by cryptocurrency lender Genesis. The plan, which was filed last week, proposes liquidating assets instead of reorganizing them. According to U.S. Trustee William Harrington’s filing in the U.S. Bankruptcy Court, this change is considered a significant deviation from the original plan.
Lack of Transparency and Important Information
The amended disclosure lacks crucial information regarding creditor recoveries, according to the U.S. Trustee. It also highlights several unresolved issues resulting from charges brought against Genesis by New York Attorney General Letitia James last month. These complications further complicate the situation.
Last month, James sued DCG, Genesis’ parent company, along with former Genesis CEO Michael Moro and DCG CEO Barry Silbert for alleged investor fraud. Gemini, a cryptocurrency exchange, also faced similar charges from James’ office.
No response has been provided by DCG regarding the U.S. Trustee’s filing. The next hearing is scheduled for November 7th to discuss a previously filed disclosure statement from June.
Hot Take: Government Opposition Puts Genesis’ Bankruptcy Plan at Risk
The U.S. government’s disapproval of Genesis’ updated bankruptcy plan poses a significant obstacle for the crypto lender. The decision to liquidate assets instead of reorganizing them has drawn criticism and concerns over transparency and creditor recoveries. Additionally, unresolved legal issues resulting from fraud charges further complicate the situation.
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