Genesis Distribution Plan Now Authorized by Court to Pay $3 Billion in Digital Assets and Cash

Key Points:

  • The court approved Genesis distribution plan to return $3 billion in assets to customers, overcoming objections from DCG.
  • Judge ruled DCG last in line for repayment, with creditors prioritized for asset distribution.
According to Bloomberg, Genesis Global, the bankrupt crypto lending company, has received court approval to return around $3 billion in cash and cryptocurrencies to its customers.
Genesis Distribution Plan Now Authorized by Court to Pay $3 Billion in Digital Assets and Cash
Genesis Distribution Plan Now Authorized by Court to Pay $3 Billion in Digital Assets and Cash 2

Court Approves Genesis Distribution Plan

The decision follows a Chapter 11 repayment plan, approved by Judge Sean Lane, which includes a unique structure for returning Bitcoin and other tokens to creditors. The ruling clears the path for Genesis to return customer assets that have been frozen since the firm paused withdrawals in November 2022.

The court’s decision also rejected an objection from Genesis’ parent company, Digital Currency Group (DCG), which argued that Genesis should not pay customers and creditors more than it held in crypto assets at its bankruptcy filing in January 2023.

As an equity holder, Judge Lane ruled that DCG is last in line for repayment and lacks the standing to challenge the Genesis distribution plan. He emphasized that the value available for distribution will be absorbed by creditors who are not fully repaid, leaving DCG out of the money by billions of dollars.

Cryptocurrency prices have surged since Genesis filed for bankruptcy, creating a dispute between DCG and Genesis over who should benefit from the price increases. DCG argued that creditor claims should be based on the crypto prices at the time of the bankruptcy filing, when Bitcoin was around $24,000, compared to more than $66,700 on Friday. Judge Lane dismissed this argument, stating that Genesis must pay numerous other creditors, including financial regulators with $32 billion in claims, before paying DCG.

Regulatory Settlements Secure Asset Returns for Gemini Earn Customers

Genesis has estimated that creditors who lent digital assets could recover up to 77% under the Genesis distribution plan. The proposal has significant support from creditors, including customers of the Gemini Earn program, run jointly with the Winklevoss brothers’ Gemini Trust Co. Additionally, Judge Lane approved a settlement with New York Attorney General Letitia James, ensuring assets would be returned to former Earn customers rather than state authorities.

A separate settlement with the US Securities and Exchange Commission was also approved, resolving a different complaint related to the Earn program, which has now been terminated.

Genesis Distribution Plan Now Authorized by Court to Pay $3 Billion in Digital Assets and Cash

Key Points:

  • The court approved Genesis distribution plan to return $3 billion in assets to customers, overcoming objections from DCG.
  • Judge ruled DCG last in line for repayment, with creditors prioritized for asset distribution.
According to Bloomberg, Genesis Global, the bankrupt crypto lending company, has received court approval to return around $3 billion in cash and cryptocurrencies to its customers.
Genesis Distribution Plan Now Authorized by Court to Pay $3 Billion in Digital Assets and Cash
Genesis Distribution Plan Now Authorized by Court to Pay $3 Billion in Digital Assets and Cash 4

Court Approves Genesis Distribution Plan

The decision follows a Chapter 11 repayment plan, approved by Judge Sean Lane, which includes a unique structure for returning Bitcoin and other tokens to creditors. The ruling clears the path for Genesis to return customer assets that have been frozen since the firm paused withdrawals in November 2022.

The court’s decision also rejected an objection from Genesis’ parent company, Digital Currency Group (DCG), which argued that Genesis should not pay customers and creditors more than it held in crypto assets at its bankruptcy filing in January 2023.

As an equity holder, Judge Lane ruled that DCG is last in line for repayment and lacks the standing to challenge the Genesis distribution plan. He emphasized that the value available for distribution will be absorbed by creditors who are not fully repaid, leaving DCG out of the money by billions of dollars.

Cryptocurrency prices have surged since Genesis filed for bankruptcy, creating a dispute between DCG and Genesis over who should benefit from the price increases. DCG argued that creditor claims should be based on the crypto prices at the time of the bankruptcy filing, when Bitcoin was around $24,000, compared to more than $66,700 on Friday. Judge Lane dismissed this argument, stating that Genesis must pay numerous other creditors, including financial regulators with $32 billion in claims, before paying DCG.

Regulatory Settlements Secure Asset Returns for Gemini Earn Customers

Genesis has estimated that creditors who lent digital assets could recover up to 77% under the Genesis distribution plan. The proposal has significant support from creditors, including customers of the Gemini Earn program, run jointly with the Winklevoss brothers’ Gemini Trust Co. Additionally, Judge Lane approved a settlement with New York Attorney General Letitia James, ensuring assets would be returned to former Earn customers rather than state authorities.

A separate settlement with the US Securities and Exchange Commission was also approved, resolving a different complaint related to the Earn program, which has now been terminated.

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