Bitrabo Editorial
The bankrupt cryptocurrency lender, Genesis Global Capital, has been given the green light by the court to kickstart its $3 billion repayment plan for its creditors. This decision also reveals that Genesis’s parent company, Digital Currency Group (DCG), will not be recovering any value from the bankruptcy payout scheme.
Court Backs Genesis in Dispute with DCG Over Repayment Plan
In a recent court ruling, Judge Sean Lane from the US Bankruptcy Court in the Southern District of New York has approved Genesis’s proposed repayment plan to settle its debts after having filed for bankruptcy in January 2023.
Genesis was a prominent crypto lending platform that ceased operations following the collapse of the cryptocurrency exchange FTX and its trading arm Alameda Research in November 2022.
It was reported that Genesis had provided substantial loans to Alameda Research and sent funds to Three Arrows Capital before its liquidation order in June 2022.
Genesis’s repayment plan aimed to ensure that each customer received at least 77% of their deposits, facing opposition from DCG, its parent company, which argued that customers were set to receive more than their rightful share due to the recent surge in crypto asset values.
Judge Lane dismissed DCG’s objection, stating that they had no significant stake in the repayment fund as junior creditors, despite being an equity holder in the bankrupt company.
According to the Judge, DCG is unlikely to receive any substantial value from the settlement after Genesis resolves its debts with creditors, including state and federal regulators with higher repayment priority.
Overview of the Cryptocurrency Market
Currently, the total market capitalization of cryptocurrencies stands at $2.27 trillion, showing a 0.25% decline based on the most recent data available.