US DoJ names Genesis in FTX creditors committee

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Blockchain
US DoJ names Genesis in FTX creditors committee

Crypto lending platform Genesis, along with popular crypto market maker Wintermute and others, will form the FTX creditors committee.

Genesis and other FTX victims form the bankruptcy committee

A court filing released today showed that the Justice Department had added the crypto lending platform Genesis to a panel created to resolve the issues surrounding FTX’s insolvency, which has plagued the industry over the past month.

Genesis crypto lending platform and a subsidiary of Digital Currency Group (DCG), a venture capital company, have been tapped by the US Department of Justice to join the US Trustee committee to facilitate a quick resolution to the FTX crisis.

Genesis’ addition to the committee comes shortly after its apparent company, DCG, granted a bailout of $140 million as the crypto lending solution had declared that it had lost more than $170 million to the FTX collapse last month. The company also announced seeking more funds to avoid impending insolvency.

In situations such as the one triggered by FTX’s downfall, the Trustee unit of the US Justice Department creates a creditors committee. This panel oversees proceedings during and after the crisis, proffering solutions and resolving issues caused by the bankrupt company. The court usually relies on information and solutions offered by the committee in these situations.

According to the report, the committee can hire its own legal counsel and financial advisers when conducting relevant investigations on the events leading to one of the biggest collapses of a crypto company. In addition, all the expenses by the committee must be covered by the bankrupt company in question.

The report identified popular crypto market maker Wintermute as another committee member. The Virginia-based company was also exposed to the FTX contagion to the tune of around $55 million.

Other listed members include Coincident Capital International of Carson City, Nevada, Octopus Information of the British Virgin Islands, Zachary Bruch, an individual creditor represented by Hunton Andrews Kurth, and a couple of other individual creditors.

Meanwhile, the FTX debacle has led to increased calls for tighter regulations in the crypto industry. The China Securities Regulatory Commission (CSRC) recently echoed similar sentiments, calling for stricter regulations of crypto companies to protect retail customers.

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Ogwu Osaemezu Emmanuel

Ogwu Osaemezu Emmanuel is a graduate of Mass Communication and Media Studies. He joined the blockchain movement in 2016 when a friend of his introduced him to an investment platform accepting bitcoin. He has never looked back since then. Emmanuel believes the world needs real change and freedom from poverty. He sees crypto and the underlying distributed ledger technology as the catalyst to a better future for all.