Genesis Judge Denies FTX’s Bid to Participate in Confidential Mediation Sessions: Report

A judge ruled that FTX cannot join confidential mediation sessions between bankrupt crypto lender Genesis Global Holdco and its parent company Digital Currency Group (DCG).

The ruling days after Genesis denied owing FTX anything.

• According to the Bloomberg report, US Bankruptcy Judge Sean Lane refused to open the settlement talks to the SBF-founded beleaguered crypto exchange, which claims that Genesis owes it $3.9 billion.
• In a ruling on June 5th, Lane stated,

“There will be a certain amount of radio silence because mediation needs that to work. Shortening the mediation does not shorten the case.”

• Genesis and DCG, on the other hand, have been granted a 100-day extension to arrange a revised payout proposal which would essentially underpin the Chapter 11 bankruptcy plan to compensate hundreds of thousands of Genesis creditors.
• With this move, the judge has overruled the objections of FTX and several Genesis customers who had emailed the judge, calling to end the settlement talks and order payouts to creditors.
• Some creditors have also complained about being excluded from mediation discussions.
• In May, FTX sought $4 billion from the bankrupt crypto lender – part of efforts to recoup value for creditors. A month later, Gensis filed an estimation procedure motion which stated that FTX is entitled to claims totaling “$0.00.”
• FTX debtors later objected to the nil claim estimation and said in a court filing that they are by far the “largest unsecured creditors” in the Genesis Debtors’ Chapter 11 cases, adding that it is “crucial they participate in the mediation.”