Judge approves Genesis Global’s $3 billion customer repayment plan

Bankrupt cryptocurrency lender Genesis Global has been approved by a bankruptcy court to return approximately $3 billion in cash and cryptocurrencies to customers.

Importantly, the ruling leaves Genesis’ parent company, Digital Currency Group (DCG), unable to recover from bankruptcy.

DCG removed from Genesis 11 plan

In a May 17 court filing, Bankruptcy Judge Sean Lane approved a Chapter 11 liquidation plan for failed crypto financier Genesis Global. Judge Lane said the plan’s distributive principles meant compromise. USD creditors receive short-term dividends partially funded by the monetization of certain digital assets, and digital asset creditors receive “in-kind” dividends to the extent possible.

Furthermore, Judge Lane ruled that: DCG had no legal status Challenge your Chapter 11 plan. The judge ruled that DCG was the last possibility of repayment because it was the shareholder. In addition, the court noted that Genesis’ value had been impaired. distributed to creditors; Those who are not repaid in full and have priority over DCG.

read more: Who is Barry Silbert, founder of Digital Currency Group (DCG)?

“The Court found that the limitations on DCG’s rights as a shareholder were prudent and reasonable in nature.
“This plan is a liquidation plan designed to maximize recovery for unsecured creditors who have allegedly been harmed by DCG’s conduct,” Judge Lane said. I have written.

Nevertheless, the DCG may file an appeal to revoke the approval.

Judge Lane also approved a related judgment. Settlement with New York State Attorney General Letitia James, sued Genesis over its acquisition program. The settlement ensures that assets are returned to former Earn customers rather than sent to state authorities.

“In fact, the NYAG Settlement Agreement provides the process by which distributions to creditors can be made most expeditiously,” Judge Lane said.

In fact, the court’s ruling allows Genesis to return frozen customer assets starting in November 2022. The DCG-owned company was one of several crypto lending companies to fail in 2022 and file for bankruptcy in January 2023. The lender reportedly owes more than $3 billion to its top 50 creditors, including well-known companies such as cryptocurrency exchange Gemini.

read more: Major crypto bankruptcies: What you need to know

Bankruptcy proceedings include the liquidation of large-scale assets. Sale of 36 million Grayscale Bitcoin Trust (GBTC) shares It was valued at more than $1.65 billion earlier this year. On the other hand, the previous business was It received significant attention from the US SEC and other regulatory authorities.