FTX and its affiliates have objected to extending the court-ordered settlement proposals of insolvent crypto lender Genesis.
In a recent court filing, FTX said it was not invited to a court-appointed mediation in May between Genesis, its parent company, Digital Currency Group, and its creditor, Gemini Trust Co, a major creditor to Genesis.
A bankrupt cryptocurrency exchange filed a massive $3.9 billion claim in Genesis Chapter 11, as it resisted a request from Genesis Global to value FTX creditors’ claims at $0.00.
On the other hand, Genesis argued that denying FTX’s claim “is necessary to avoid undue delays in the timing and amount of creditors’ distributions and to expedite confirmation of the Chapter 11 plan.”
The FTX filing includes more than a dozen other Genesis creditors who have filed objections to the arbitration extension.
A hearing on the extension is scheduled for Monday, but those objections are delaying a settlement attempt by Genesis and creditors.
Genesene, a company that offers customers a product by lending their digital currencies, filed for bankruptcy in January after the credit crunch hit the crypto industry.
A cryptocurrency lender failed to reach a final agreement with creditors in February, leading to months of delays and pressure from retail lenders to resolve financial issues as quickly as possible.
“As a lender who follows the procedures seriously, I, along with many others, have noticed the lack of significant progress in resolving financial problems,” wrote the lender Youssef Sharif.
“Without concrete steps or a real commitment to a just solution, it is difficult to see this extension as more than a stalling tactic.”
The process is further complicated by the fact that the Securities and Exchange Commission has assigned the company a consumer lending scheme that has involved hundreds of thousands of Gemini customers, amounting to nearly $900 million.
Although the mediation talks held in May remained in the mediation, Gemini said the SEC and two major creditors are working on “an improved reorganization plan that could proceed without the involvement of the DCG agreement if the mediation fails.”
Sam Bankman-Fried blames the law firm for the failure of FTX.
Sam Bankman-Fried, founder of cryptocurrency exchange FTX, is preparing for the debate on the advice of Silicon Valley law firm Fenwick & West to defend against fraud charges.
Last week, attorneys asked plaintiffs to turn over documents that the California company provided to the government between 2017 and 2022.
Bancomane-Fried’s defense team reportedly said that the legal advice provided by Fenwick & West was “essential to the preparation of the defence”.
Pannemann-Fried is said to be planning to use what is called the lawyer’s defense, which is used to challenge motions he was planning to break the law.
Earlier, the disgraced crypto boss asked a New York federal judge to dismiss most of the criminal charges brought by federal prosecutors.