NEW YORK, Monday, May 27, 2024 – Cryptocurrency lender Genesis Global Holdco LLC secured court approval on May 21, 2024, for its final bankruptcy liquidation plan.1
The plan allows for the return of approximately $3 billion in customer assets, representing roughly 77% of the value of their claims.
This decision by Judge Sean H. Lane of the Southern District of New York follows months of negotiations involving Genesis, creditors, and various stakeholders. It also includes a settlement with the New York Attorney General’s office regarding allegations of misleading investors about risks associated with the “Gemini Earn” program.
The exact timeline for customer asset distribution is still under development, but it’s expected to begin within the next few months.
The process will involve verifying claims and ensuring adherence to relevant regulations.
Genesis filed for Chapter 11 bankruptcy protection in January 2023, citing financial strain caused by the collapse of Three Arrows Capital, a crypto hedge fund, and a broader market downturn. The company’s struggles highlighted vulnerabilities within the crypto ecosystem and potential risks for investors.
The court-approved plan offers some relief to Genesis customers who have been unable to access their assets since November 2022. However, it remains unclear whether Genesis will be able to fully repay all creditors.
Separate from the court-approved liquidation plan, Genesis and its parent company, Digital Currency Group (DCG), reached a settlement in November 2023 regarding a dispute over loan repayments. This dispute stemmed from established credit lines between the two entities. Genesis had previously filed a lawsuit against DCG for missed loan payments on a $620 million debt.
As part of the settlement, DCG has already repaid $227.3 million and plans to make an additional $275 million payment by April 2024.
The court’s recent approval of Genesis’ liquidation plan represents a significant step forward in resolving the company’s bankruptcy. This plan allows customers to recover approximately 77% of their claims. However, it’s important to note that DCG will not receive any payout under this plan.
- Genesis to Repay 77% of Customer Assets in Bankruptcy Liquidation Plan: https://finance.yahoo.com/news/genesis-set-return-3b-customer-054758153.html[↩]
