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    Home » Genesis to return $3 billion to users after bankruptcy
    Genesis gets court approval to return $3 billion to customers, leaving parent company DCG without recovery.
    Genesis gets court approval to return $3 billion to customers, leaving parent company DCG without recovery.
    Fintech

    Genesis to return $3 billion to users after bankruptcy

    By Lucia MeiMay 20, 2024No Comments2 Mins Read
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    • Genesis Global can now return around $3 billion to its customers as part of its bankruptcy plan, leaving their parent company, Digital Currency Group, without any financial recovery.
    • The court rejected Digital Currency Group’s request to limit customer payouts to the cryptocurrency values at the time of Genesis’ bankruptcy filing, noting that crypto prices have increased significantly since then.
    • Genesis will not have enough cryptocurrency to fully repay customers, expecting to return up to 77% of what customers are owed, depending on how market prices change.

    Genesis Global obtained court approval for their Chapter 11 bankruptcy plan, enabling the return of approximately $3 billion in assets to their customers. This decision resulted in no financial recovery for their parent company, Digital Currency Group. The plan allows partial repayments to customers, constrained by the availability and future fluctuations of cryptocurrency values.

    Court approves plan

    Genesis Global received approval from a U.S. Bankruptcy Court for their Chapter 11 liquidation plan. This decision allows them to distribute about $3 billion in cash and cryptocurrencies to their customers. The court’s approval overruled objections from Digital Currency Group (DCG), which argued for payouts based on the lower cryptocurrency values at the time of Genesis’ bankruptcy filing in January 2023.

    Also read: Independent bankruptcy examiner ordered to investigate FTX collapse

    DCG left empty-handed

    The court’s decision ensures that DCG, Genesis’ parent company, will recover nothing from the bankruptcy assets. This outcome follows Judge Sean Lane’s dismissal of DCG’s arguments, emphasising that even if customer claims were limited to earlier values, Genesis still faced substantial claims from other creditors, including federal and state financial regulators.

    Also read: New York Attorney General slaps crypto titans Gemini, Genesis, and DCG with fraud suit

    Repayment challenges

    Genesis will return funds to customers in cryptocurrency wherever possible, but the available crypto assets are insufficient for full repayment. The company estimated it could pay up to 77% of the value of customer claims, influenced by the ongoing fluctuations in cryptocurrency prices. This partial repayment approach underscores the challenges Genesis faces in fully satisfying customer claims under the bankruptcy conditions.

    bankruptcy Genesis
    Lucia Mei

    Lucia Mei, an intern reporter at BTW Media dedicated to tech-trends, fin tech and IT infrastructure. She graduated from Anhui university of science and technology. Send tips to l.mei@btw.media

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