Crypto lender Genesis Global is pursuing a chapter 11 liquidation plan that abandons a previous settlement proposal to restructure the $1.7 billion in loans it extended to its parent company Digital Currency Group, WSJ Pro Bankruptcy reported. Genesis filed court papers Wednesday for a plan to exit from chapter 11 without a resolution of its claims against DCG, the crypto conglomerate founded by finance veteran Barry Silbert. Genesis is now preparing to liquidate its assets without the settlement proposal reached in August that intended to deliver estimated recoveries of between 70% to 90% for Genesis customers, including users of crypto exchange Gemini Trust’s Earn program. The settlement proposal didn’t get the support of key stakeholders, notably Gemini and its founders, the Winklevoss brothers, and the parties had been in continuing negotiations. Ultimately, Genesis was unable to reach an agreement with DCG on final debt terms, Genesis said in filings with the U.S. Bankruptcy Court in New York. And last week, New York Attorney General Letitia James filed a lawsuit against Gemini Trust, Genesis and DCG for allegedly defrauding more than 230,000 investors of more than $1 billion. In light of the lawsuit, Genesis and the official committee representing its customers determined that a settlement with DCG isn’t a viable route, Genesis said in the filings.
