Source: blockchain.news
According to documents filed with the court on February 4, a seven-member committee has been formed to represent the interests of unsecured creditors in the bankruptcy case involving Genesis Global.
The committee will act as a representative of creditors in court and will have the right to participate in the restructuring plan, as well as to be consulted before key decisions. In most cases, members are chosen at random from a list of the 20 largest unsecured creditors.
Mirana Asset Management, which is a division of cryptocurrency exchange Bybit, SOF International, Digital Finance Group, and cryptocurrency exchange Bitvavo are some of the organizations that have been selected as members, along with three individual creditors: Amelia Alvarez, Richard Weston, and Teddy André Amadeo Goriss.
The United States Trustee is an institution of the executive branch of the Department of Justice that is responsible for administering bankruptcy proceedings. William Harrington, a spokesman for the United States Trustee, named the organization. In the bankruptcy filing process, one of the most significant steps is establishing a committee of creditors.
Bitvavo is one of the largest creditors, with an exposure of more than $290 million; It is followed by Mirana, which has an exposure of $150 million, and Digital Finance Group, which has an exposure of $37 million.
On January 19, Genesis Capital, which includes Genesis Global Holdings and its lending business subsidiaries, Genesis Global Capital and Genesis Asia Pacific, filed for bankruptcy, citing potential liabilities of up to $10 billion.
Two months after discovering liquidity problems as a result of the failure of cryptocurrency exchange FTX, the companies filed for protection under Chapter 11 of the Bankruptcy Code. Since November 16, 2022, the Genesis Global Capital platform has not allowed to process any withdrawals.
On January 24, a group of creditors filed a securities class action lawsuit against Digital Currency Group, the parent company of Genesis, as well as its creator and CEO, Barry Silbert. The lawsuit alleges that the defendants violated federal securities laws.
In the case, Genesis is alleged to have engaged in securities fraud by devising a scheme to defraud current and potential lenders of digital assets by making claims that were false and misleading. The plaintiffs believe that Genesis knowingly misrepresented its financial status, which they allege is a violation of Section 10 of the United States Securities Exchange Act (b).
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