Crypto Lender Genesis Approved to Return $3B to Customers
Genesis Global is set to return $3 billion in cash and crypto to its customers after receiving court approval on Friday.
Bankruptcy Judge Sean Lane approved the firm's Chapter 11 liquidation plan, overruling objections from its parent group, Digital Currency Group (DCG).
DCG argued Genesis should pay its customers no more than what the crypto assets were valued at the time of its bankruptcy filing in January 2023. Bitcoin was priced at $21,000 in January 2023, compared to its current price of $67,000.
Lane determined that even if customer claims were capped at the lower amounts, Genesis would still be required to prioritize paying other creditors, with claims totaling $32 billion, before any funds could be allocated to its equity owner, DCG.
"There are nowhere near enough assets to provide any recovery to DCG in these cases," Lane wrote.
Lane previously approved Genesis to sell shares of Grayscale Bitcoin Trust, Grayscale Ethereum Trust, and Grayscale Ethereum Classic Trust, totaling $1.6 billion.
Genesis attorney Sean O'Neal also disagreed with DCG's arguments. "We don't buy into the idea that claims are capped at the petition date value," O'Neal said.
In February, Genesis reached an agreement with Gemini. The Winklevoss-owned firm said it would return $1.1 billion to its Ear program customers, who will receive 100% of their assets, plus any realized gains.