According to Cointelegraph: Digital Currency Group (DCG), the parent company of Genesis Capital, has objected to Genesis's bankruptcy plan, claiming it overpays creditors and violates the Bankruptcy Code.
On February 5, the company filed a motion accusing Genesis of proposing to pay its customers more than they are legally entitled to. DCG alleges that Genesis, along with certain unsecured creditors and lenders, concocted a plan to pay unsecured creditors "hundreds of millions of dollars" beyond their full claim amount. They claim this strategy tilts in favor of a small, influential group of creditors at others' expense, thus violating the Bankruptcy Code.
Genesis declared bankruptcy in January 2023 after suspending withdrawals due to a liquidity crisis in November 2022. The firm is reported to owe over $3.5 billion to its top 50 creditors which include companies like Gemini. It is part of multiple crypto lending firms affected by 2022's significant crypto bear market.
Genesis recently stated it had settled with the U.S. Securities and Exchange Commission for $21 million. A February 14 hearing was proposed by Genesis's legal team to accept the SEC settlement into its bankruptcy case.
Genesis had earlier indicated in November 2023 that DCG had agreed to repay its outstanding loans of $324.5 million by April 2024. This anticipated deal was aimed at ending a lawsuit filed against DCG that sought the repayment of overdue loans worth around $620 million.