Genesis Mediation “Dies,” What Happens To The Enormous Debt?
- Shin invites Genesis Creditors to send her a message regarding the situation.
- The DCG risks defaulting if it cannot pay its $630 million debt by May 9 to 11.
On Wednesday, Crypto journalist and Unchained Podcast Host, Laura Shin tweeted that the Genesis Mediation was dead. In detail, Shin learned from a Genesis creditor and another person close to the matter that mediation efforts had failed due to the parties being at an impasse. Accordingly, Shin invited other Genesis creditors to send her a message regarding the situation.
Shin remarked that the Digital Currency Group (DGC) may be unaware that the mediation has ended. According to her, the DGC may still believe that mediations are ongoing because they claim to be in active mediation.
The cryptocurrency community’s response to Shin’s tweet was generally negative. A prominent crypto personality felt validated that the situation was, in fact, an entire Ponzi scheme; some criticized that the mediator with 39 years of experience failed in only a matter of days; and others felt even more discouraged considering the other negative crypto news this week such as Jump Street leaving and Binance accusations.
Between May 9 and 11, the DCG must pay the Genesis bankruptcy estate $630 million. The DCG risks defaulting if it cannot pay its debt in full or in a manageable way. Therefore, the mediation’s primary goal was to settle this debt as soon as possible.
Previously, on May 1, Genesis Bankruptcy Judge Lane issued an order to start a 30-day process to mediate “the contribution to be provided by DCG and its affiliates” to the Genesis bankruptcy. Judge Lane directed the order toward Genesis, Digital Currency Group (DCG), the Unsecured Creditors Committee (UCC), the Ad Hoc Group of Creditors (AHG), and Gemini.
Genesis Capital’s filing for Chapter 11 Bankruptcy on January 2023 was the cause of this mediation. As a result, the DGC promised to address its obligations of $526 million due this month and $1.1 billion under a promissory note due in June 2032.