FTX Trading Ltd., as the largest unsecured lender of bankrupt crypto lender Genesis Global, objected to Genesis’ proposed mediation extension. The Bahamas-based exchange has raised concerns about being excluded from the mediation process and its non-liquidation claims are estimated at zero by Genesis. This article explores the details of FTX’s objections and their implications for the ongoing Chapter 11 process.
FTX Trading Ltd. and its debtor affiliates have united with a group of creditors to oppose Genesis Global’s proposal for an extension of the mediation period. As Genesis’ most significant unsecured creditor, FTX Trading Ltd., based in the Bahamas, has formally objected to Genesis’ proposed mediation extension. Objections were recently filed with the US Bankruptcy Court for the Southern District of New York. According to FTX’s debtors, their claims in the Chapter 11 Genesis proceedings totaled $3.9 billion, making them the primary creditors. This objection is in response to a motion filed by Genesis Global, which seeks to zero FTX debtors’ claims.
FTX emphasized in its filing that the Genesis motion was filed against insolvent crypto exchanges and their affiliated debtors without prior notice. Genesis confirmed its motion as a necessary step to avoid undue delay and quickly move forward with confirmation of its Chapter 11 plans. However, FTX pointed out that the specific details of these plans have not been disclosed and are currently being negotiated among creditors selectively selected by Genesis for mediation.
FTX is of the opinion that excluding FTX debtors from the mediation process makes it a waste of resources and should not proceed without their involvement. Additionally, FTX expressed dissatisfaction with its exclusion from the Genesis court-appointed mediation proceedings in May. This mediation involves other parties to the Genesis Chapter 11 process, such as Genesis parent company Digital Currency Group and Winklevoss’ crypto exchange Gemini.
FTX’s objections to the mediation extension were supported by more than a dozen other parties who owed Genesis a lot of money. A hearing to discuss the mediation extension is scheduled for June 5, 2023.
FTX Trading Ltd., Genesis Global’s largest unsecured creditor, has lodged strong objections to the proposed extension of the mediation. These objections raise concerns about exceptions and fairness in bankruptcy proceedings, leading to an important hearing to come.