Genesis Bankruptcy Commission Creates Body to Protect Rights of Unsecured Creditors

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Genesis Global has created a special committee that will represent the interests of creditors in court. The committee included seven of the twenty largest unsecured creditors.

In addition to private investors, the committee includedrepresentatives of the Digital Finance Group, the Bitvavo crypto exchange and Mirana Asset Management (the management company of the Bybit crypto exchange). Coordinating the joint work of the committee and the bankruptcy court has been entrusted to DOJ Trustee William Harrington, who is responsible for monitoring the case.

Genesis Global, along with its credit subsidiaries, filed for bankruptcy on January 19, citing inability to
repayment of debt obligations amounting to approximately$11 billion. The companies turned to the bankruptcy court for protection from claims by creditors while reorganization measures were carried out. The reason that forced Genesis to file the application was a liquidity problem that arose as a result of the collapse of the FTX crypto exchange. Withdrawals from the Genesis Global Capital platform have been suspended
back on November 16th.

Formation of the Unsecured Committeecreditors - this is a mandatory stage prior to the consideration of corporate bankruptcy cases on the merits. So this category of clients of a bankrupt company receives the right to participate in the development of a reorganization plan and the right to vote in making key decisions.

Recently, a group of creditors filed
class action against parent companyGenesis Digital Currency Group and its CEO Barry Silbert were accused of violating federal securities laws. The lawsuit alleges that Genesis committed securities fraud by making false and misleading statements and intentionally misrepresenting its financial position.