US Bankruptcy Judge Sean Lane has ruled that FTX will not be allowed to participate in the mediation between Genesis Global, a now-bankrupt crypto lender, and its parent company, Digital Currency Group (DCG), owned by Barry Silbert. Genesis and its major creditors, along with DCG, aim to create a revised payout proposal that will serve as the foundation for a Chapter 11 bankruptcy plan to repay Genesis’ many creditors. In his ruling, Judge Lane rejected objections from FTX and several Genesis customers who had called for an immediate end to the settlement talks and demanded clarity on their claims. The judge emphasized the need for confidentiality during mediation and stated that shortening the process would not expedite the case.

Genesis to Update Its Reorganization Plan

Genesis now intends to update its reorganization plan, which will be subject to creditor voting once filed. Judge Lane will consider these votes when deciding whether to approve the proposal. Genesis disputes FTX’s claim of owing $3.9 billion and has requested an estimation to determine the exact amount. This request will be considered by Judge Lane at another hearing later this year.

FTX’s Efforts to Recover Assets

FTX filed for bankruptcy last year and has worked extensively to recover assets owed to creditors. In April of this year, the exchange’s new management announced that it had successfully recovered more than $7.3 billion in cash and liquid crypto assets. They also floated the idea of restarting the exchange business to maximize value for remaining stakeholders.

US Bankruptcy Judge Sean Lane has ruled that FTX will not be allowed to participate in the settlement talks between Genesis Global and Digital Currency Group. Genesis will update its reorganization plan, subject to creditor voting, and Judge Lane will consider these votes when deciding whether to approve the proposal. Genesis disputes FTX’s claim of owing $3.9 billion and has requested an estimation to determine the exact amount. FTX continues to work on recovering assets owed to creditors and may consider restarting the exchange business to maximize value for remaining stakeholders.

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