FTX Trading Ltd., as the largest unsecured creditor of bankrupt crypto lender Genesis Global, has objected to Genesis’ proposed mediation extension. The Bahamas-based exchange has raised concerns about being excluded from the mediation process and its unliquidated claims being estimated at zero by Genesis. This article explores the details of FTX’s objection and its implications for the ongoing Chapter 11 proceedings.
FTX Trading Ltd. and its debtor affiliates have united with a group of creditors to oppose Genesis Global’s proposal for an extended mediation period. As Genesis’ most significant unsecured creditor, FTX Trading Ltd., based in the Bahamas, has officially filed an objection to Genesis’ mediation extension plan. The objection was recently submitted to the U.S. Bankruptcy Court for the Southern District of New York. According to FTX’s debtors, their claims in Genesis’ Chapter 11 proceedings amount to a substantial $3.9 billion, making them the primary creditors. This objection is in response to a motion filed by Genesis Global, which seeks to value FTX’s debtors’ claims at zero.
FTX emphasized in its filing that Genesis’ motion was presented to the bankrupt crypto exchange and its affiliated debtors without prior notice. Genesis justified its motion as a necessary step to avoid undue delay and swiftly move forward with the confirmation of a Chapter 11 plan. However, FTX pointed out that the specific details of this plan have yet to be disclosed and are currently being negotiated among creditors selectively chosen by Genesis for mediation.
FTX argued that excluding the FTX debtors from the mediation process renders it a futile use of resources and should not proceed without their involvement. Moreover, FTX expressed dissatisfaction with its exclusion from Genesis’ court-appointed mediation process in May. This mediation involved other parties in Genesis’ Chapter 11 proceedings, such as Genesis’ parent company Digital Currency Group and the Winklevoss-owned crypto exchange Gemini.
FTX’s objection to the mediation extension is supported by more than a dozen other parties that are owed significant sums by Genesis. A hearing to address the mediation extension is scheduled for June 5, 2023.
FTX Trading Ltd., the largest unsecured creditor of Genesis Global, has filed a solid objection to the proposed mediation extension. This objection raises concerns about exclusion and fairness in the bankruptcy proceedings, leading to a crucial upcoming hearing.