Genesis Global Capital, the bankrupt subsidiary of Digital Currency Group (DCG) has secured the approval of Judge Sean Lane to distribute billions to its creditors.
Genesis Bankruptcy Payments May Commence
The company paused withdrawal in November 2022 in the aftermath of the collapse of the FTX Derivatives Exchange. The firm filed for bankruptcy in January 2023. Genesis came off as the last major firm to go bankrupt in what appeared as a major trend for crypto firms at the time.
Its efforts to distribute funds to its creditors has been marred by two major bottlenecks. These include its parent company DCG which wants a claim of its assets and Gemini Earn complication.
DCG opposed the creditors repayment as it said it gives them “impermissible windfall” at its expense. In the ruling, Judge Lane disagreed and ordered that Genesis Global’s Chapter 11 bankruptcy repayment should proceed. Under this plan, the creditors will receive about 77% of their funds back.
On its part, the Judge ruled that DCG is among the last in line to benefit from any meager amount Genesis has left. This is because it is a majority owner of the bankrupt business.
What Will Happen to Gemini Earn Customers?
Gemini Earn customers were caught up in the Genesis Bankruptcy saga as the latter acted as the custodian for the funds generated. When it filed for bankruptcy, the funds were locked alongside, sparking a heated legal battle with Gemini Exchange.
The New York Attorney General (NYAG) also stepped in and sued Genesis Global. As part of the ruling, Judge Lane has approved settlement payment to the New York Attorney General. This payment will be deployed to repay Gemini Earn customers.
Most of the creditors will be paid in cash and in digital assets. The value of Bitcoin (BTC) at the time of the bankruptcy was around $24,000. However, at the moment, the coin is trading above $66,000. Despite the slashed percentage in the repayment, the aggregate value might be more overall.
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