Digital currency group opposes Genesis subcontract with NYAG

Venture capitalists Digital Currency Group (DCG) on February 21 filed objections to a settlement with the New York Attorney General's (NYAG) office of bankrupt crypto lender Genesis.

According to the objection, the NYAG settlement, which is only available in revised form, will be paid to unpaid creditors by the date of the distribution, rather than on the date of the petition, as required by the Bankruptcy Code. The United States Supreme Court has ruled that a court cannot allow bankruptcy laws to be violated, the dissent said.

Additionally, the settlement “simply delivers to the NYAG (and ultimately unsecured creditors) all residual value in the debtor's estate after unsecured creditors are paid,” which “D.C.G. It robs a creditor and a real chance of getting equity. “Participating in the waterfall in the debtors' scheme” “literally directs the remaining assets of the debtors to be disposed of after satisfying the claims of unsecured creditors.”

According to the agreement, NYAG will receive payment on the claim after unsecured creditors are paid. As the sole equity holder in Genesis, DCG is a secured creditor.

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Genesis has defaulted on all its creditors, DCG said. His division must demonstrate that he “considered the merits of the claims, evaluated options for settling the claims, sought the best deal for the property, and initiated arm's-length negotiations to maximize the overall value of the property.” According to a DCG statement provided to Cointelegraph:

“DCG opposes this chaotic arrangement, put together at the last minute and in secret, which seeks to distribute all property values ​​to preferred creditors who receive full value of their claims in advance.”

The deficiencies are signs that the borrowers did not adequately consider the possibility of winning the NYAG claims in court, according to the objection. The DCG has asked the court to withhold permission for the action until the objections are resolved.

Barry Silbert objects to “extra fees” for Genesis lenders – Digital Currency Group (DCG) has raised objections to a settlement between the New York Attorney General and Genesis, which will receive DCG's portfolio of digital asset businesses… Image. twitter.com/4VUCROzmfH

— Industry Spread (@industryspread) February 22, 2024

DCG raised similar objections to Genesis' bankruptcy plan.

The NYAG sued Genesis along with DCG and crypto exchange Gemini in October, alleging that the defendants defrauded investors in Gemini's earnings program. Genesis suspended withdrawals in November 2022 and filed for bankruptcy in January 2023.

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