Kenne Michael 
Genesis Global, a prominent cryptocurrency lender, is contemplating a “no deal” bankruptcy plan as it faces a civil fraud lawsuit filed by New York Attorney General Letitia James. This is a significant development in the crypto industry.
According to a report by Reuter, the lawsuit, which also targets Genesis’s parent company, Digital Currency Group (DCG), and former partner Gemini Trust Co, alleges that investors lost over $1 billion through the Gemini Earn program due to fraudulent activities.
In the meantime, this action could result in a complex legal confrontation, undermining the likelihood of a speedy resolution. In January of this year, Genesis Global filed for bankruptcy.
Difficulties On Genesis Global
According to the most recent report, Genesis Global, a prominent name in the crypto lending industry, has reached a crossroads.
Notably, the litigation filed by the New York Attorney General has placed the company in a precarious position, with bankruptcy liquidation on the horizon.
Notably, on October 19, Letitia James filed a lawsuit against Genesis Global, its parent company DCG, and former partner Gemini Trust Co, accusing them of defrauding investors to the tune of over $1 billion through a jointly operated investment program known as Gemini Earn.
However, rather than wait for the lawsuit’s outcome, Genesis contemplates an unorthodox approach involving a “no deal” bankruptcy plan.
Meanwhile, this strategy seeks to distribute available crypto assets to customers while retaining the right to pursue litigation claims against DCG and other entities.
According to Genesis attorney Sean O’Neal, the decision is not made casually but is viewed as the only viable response to the legal challenges presented by the Attorney General’s complaint.
Genesis Global announced its withdrawal from the crypto trading industry in mid-September.
Creditor Concerns and Legal Difficulties
Genesis Global is considerate of its creditors and believes a bankruptcy plan coupled with a DCG resolution would serve its best interests.
However, Genesis is running out of time to finalize and present such a plan for creditor approval.
Meanwhile, the scrutinized parent company, DCG, remains committed to settlement negotiations.
A spokesperson for DCG reportedly stated that they are fully prepared to defend against Genesis’s claims in court, emphasizing their confidence in a favorable outcome.
In addition, they argue that a resolution based on litigation would ultimately result in much smaller recoveries for creditors.
In the meantime, this legal dispute adds another layer of complication to an already complex cryptocurrency landscape, where regulatory actions and investor protection are gaining prominence.
As Genesis Global navigates the turbulent waters of litigation, the cryptocurrency community closely observes, awaiting a resolution that could set a precedent for the industry.
Notably, the outcome of this case could have long-lasting effects on how cryptocurrency firms interact with regulators and manage investor disputes in the future.
