Some Genesis creditors are deciding that it’s time to take the money and run — even if all they’re able to get is a fraction of what they paid into the bankrupt lender.
Earlier this week, Stephen Sokolowski, a crypto mining executive, sold his $4 million claim against Genesis for just $1 million, or $0.25 on the dollar. It was bought by a fund managed by investment bank Jefferies, according to אַ געריכט פילינג.
It was the first publicly-disclosed sale of a Genesis bankruptcy claim, though other claims are listed and appear to have traded hands through Xclaim. This is a growing exchange for claims in crypto bankruptcies and is where Sokolowski’s claim was processed.
Jefferies declined to comment.
Sokolowski, who is the chief operating officer of Prohashing, said he thought his Genesis claim could be worth as much as twice what he got it for, based on the latest financials he’s seen. But he thinks he would only see a fraction of that this year if he had stuck with the bankruptcy process. What’s more, Sokolowski also said he’s lost faith in the information coming out from Genesis.
Prior to FTX’s collapse, Sokolowski spent over 100 hours analyzing the financials of crypto lenders and concluded that Genesis was among the safest. Sokolowski, like others, now believes Genesis’s financials, which he received directly from the lender, included misstatements. “The balance sheet was almost certainly false,” Sokolowski told Protos. “I don’t know at what point … but over time they got looser and looser with their loan terms, and common sense.”
Genesis didn’t return Protos’s request for comment for this story. In the past, Digital Currency Group (DCG), which is Genesis’s parent company, has called allegations that Genesis misstated its financial position “false” and a product of “defamatory attacks. "
Source: https://protos.com/genesis-creditors-are-starting-to-bail-on-bankrupt-lender/