The Genesis bankruptcy saga, involving a cryptocurrency lending entity, has taken a new turn as a consortium of creditors wielding $2.4 billion in claims disrupts a preliminary agreement with parent company Digital Currency Group (DCG). Describing the settlement as “completely insufficient,” the creditors argue that it fails to adequately address over a billion dollars of outstanding loans. This counter-narrative serves as a warning shot to Genesis and DCG, particularly questioning the decision to absolve CEO Barry Silbert and other DCG executives from any future legal consequences.
The contribution of DCG to the creditors’ claim settlement is entirely inadequate to satisfy even the undisputed loan amounts, let alone the substantial claims that creditors can assert against DCG and its officers and directors, including Barry Silbert.
Genesis Lenders Group
Questionable Fiduciary Conduct: Accusations Fly in Bankruptcy Court
The standoff has been formalized with a filing in the Southern District of New York’s bankruptcy court. The undisclosed group of creditors has accused both Genesis and the formal committee representing them of neglecting their fiduciary duties. They argue that the proposed settlement, which covers $630 million in unsecured loans due by May 2023 and an additional $1.1 billion by 2032, does not meet even the basic expectations for uncontested loans. Furthermore, they strongly oppose any resolution that shields Silbert and the DCG leadership from future legal entanglement.
