Genesis Global Capital, a bankrupt cryptocurrency lender, has obtained court approval to begin its $3 billion repayment plan to its creditors. The ruling reveals that Digital Currency Group (DCG), Genesis’s parent business, will not receive any compensation under the bankruptcy settlement plan.
US Court Rejects DCG’s Claims Regarding Repayment Plan, Siding With Genesis
Judge Sean Lane of the US Bankruptcy Court, Southern District of New York, approved Genesis’ proposed repayment plan on Friday. Genesis filed for bankruptcy in January 2023 and wants to settle its debts with its claimants. In November 2022, Genesis Global Capital closed due to the sudden collapse of cryptocurrency exchange FTX and Alameda Research.
A Wall Street Journal investigation claims Genesis Global Capital gave millions in unsecured loans to Alameda Research before it folded. Three Arrows Capital, a cryptocurrency hedge fund, received $2.4 billion from Genesis before its June 2022 liquidation.
Genesis filed a repayment plan in November 2023 to give each customer at least 77% of their deposited money. The parent business of Genesis, DCG, strongly opposed this idea, arguing that the proposed refund would provide clients more than they were entitled to, particularly in light of the recent increase in the value of cryptocurrency assets.
Judge Lane dismissed DCG’s appeal on Friday, stating that even though they own ownership in the bankrupt cryptocurrency lender, they are considered junior creditors and hence have no significant stake in the payback fund.
The judge clarified that DCG won’t gain significant value after Genesis repays its higher-priority creditors, including authorities.
A ruling statement said as follows:
In overruling DCG’s objection, the Court ultimately concludes that its objection is a result oriented one based on DCG’s lack of recovery as an equity holder under the Plan. But as discussed below, there are nowhere near enough assets to provide any recovery to DCG in these cases. In the end, DCG has not presented any basis for concluding that the New York Attorney General Settlement Agreement is anything but reasonable and appropriate.
Overview of the Crypto Market
The current cryptocurrency market capitalization is $2.27 trillion, down 0.25% from the latest CoinMarketCap statistics.
