REUTERS/Dado Ruvic/Illustration/File Photo Acquire Licensing RightsNEW YORK, Oct 24 (Reuters) - Crypto lender Genesis Global said on Tuesday a New York civil fraud lawsuit could lead to a bankruptcy liquidation that does not resolve its claims against parent company Digital Currency Group (DCG).
Rather than await the outcome of the lawsuit, Genesis intends to propose a "no deal" bankruptcy plan to distribute available crypto assets to customers and set up a process to preserve litigation claims against DCG and others, Genesis attorney Sean O'Neal said at a court hearing in New York.
"It's not an easy decision, but it is an obvious decision," he told U.S. Bankruptcy Judge Sean Lane.
Genesis believes creditors would be better off under a bankruptcy plan that includes a DCG settlement, but the company is running out of time to finalize a plan and send it to creditors for a vote, O'Neal said.
Genesis Global filed for bankruptcy in January after the collapse of key counterparties including FTX caused it to freeze customer redemptions in November 2022.
Persons:
Dado Ruvic, Letitia James, Genesis, DCG, Sean O'Neal, Sean Lane, O'Neal, litigate Genesis's, Mark Zuckerberg, Dietrich Knauth, Richard Chang
Organizations:
REUTERS, Genesis Global, Digital Currency Group, . New York, Gemini, U.S, New York, Meta, Thomson
Locations:
York, ., New York