- Genesis Global receives approval for its liquidation plan, set to return $3 billion in cash and cryptocurrency to customers.
- Digital Currency Group (DCG) will receive no recovery from the bankruptcy, as ruled by U.S. Bankruptcy Judge Sean Lane.
- Despite objections, Judge Lane rejects DCG’s argument to cap customer claims at lower crypto asset valuations from January 2023.
Crypto lender Genesis Global has secured a significant victory in bankruptcy court, as its liquidation plan to return approximately $3 billion in cash and cryptocurrency to customers receives approval. However, the ruling deals a blow to Genesis’s owner, Digital Currency Group (DCG), which will not recover any funds from the bankruptcy proceedings.
U.S. Bankruptcy Judge Sean Lane overruled DCG’s objection, which aimed to cap customer claims at lower crypto asset valuations from January 2023. Despite crypto prices surging since then, Judge Lane stated that Genesis must prioritize paying other creditors, including regulators with claims totaling $32 billion, before distributing funds to its equity owner.
Genesis aims to return funds to customers in cryptocurrency where possible, though it lacks sufficient assets to fully repay all outstanding claims. Sean O’Neal, an attorney representing Genesis, disputed DCG’s assertion, stating that claims should not be capped at the January 2023 valuation. Genesis had previously estimated it could repay up to 77% of customer claims, subject to future cryptocurrency price fluctuations.
With court approval, Genesis’s bankruptcy resolution progresses, providing relief to customers while leaving DCG without any financial recovery. This decision marks a significant step forward in resolving Genesis’s bankruptcy proceedings.
