Sunday, June 23, 2024

Crypto lender Genesis gets court approval to repay $3 billion to customers in liquidation.

On Friday, the cryptocurrency lender Genesis Global won a big battle in bankruptcy court when its proposal to liquidate and give back $3 billion in cash and bitcoin to its clients was approved. However, the decision strikes a blow to Digital Currency Group (DCG), the owner of Genesis, as it will not be able to emerge from bankruptcy.

DCG objected to the plan, which focused on the valuation of cryptocurrency assets, but U.S. bankruptcy judge Sean Lane overturned it. In January 2023, when Genesis declared bankruptcy, DCG contended that consumer claims ought to be limited to the worth of cryptocurrency. Since then, cryptocurrency values have increased dramatically. For instance, Bitcoin’s price has risen from $21,084 in January 2023 to around $67,000 at present.

Judge Lane dismissed DCG’s argument, ruling that Genesis would still have to pay other creditors—including federal and state financial authorities with claims totaling $32 billion—before giving money to its equity owner despite the decreased valuation.

Judge Lane stated in his decision that there are not nearly enough assets to give DCG any recovery in these matters.

Genesis wants to reimburse clients in bitcoin whenever it can, but it doesn’t have enough cryptocurrency holdings to cover all of the outstanding claims.

Genesis’s lawyer, Sean O’Neal, disputed DCG’s claim that clients might get full payment based on the lower January 2023 assessments. O’Neal asserts that we reject the notion that claims are limited to their worth on the petition date.

Genesis first projected in February that, depending on future changes in cryptocurrency prices, it may reimburse up to 77% of the total amount of consumer claims.

With this court approval, Genesis’s bankruptcy case moves closer to being resolved, giving its consumers much-needed relief while leaving its owner, DCG, without any financial gain.

Cryptured Team
Cryptured Team
The writers team at Cryptured.com is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.
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