Gemini, one of the creditors of Genesis, has made an announcement to start returning owned assets to customers. This update comes after the bankrupt firm received approval for its bankruptcy plan in a U.S. court yesterday.
Genesis Approval: Judge Ignored DCG’s Concerns
Judge Sean Lane of the U.S. Bankruptcy Court disregarded objections raised by DCG, the Genesis Crypto Creditors Ad Hoc Group, and the Office of the United States Trustee.
DCG argued for claims to be valued in USD at the time of Genesis’ bankruptcy filing, excluding gains in the crypto sector. However, Judge Lane dismissed the complaint, stating that DCG has no economic stake in the plan as there isn’t enough value for their recovery as an equity holder.
With that being said, the judge sided with the bankruptcy plan, which is anticipated to provide creditors with around $3 billion in cash and assets as part of the repayment.
Under the repayment plan, cryptocurrency creditors will be treated differently from those owed U.S. dollars. Creditors with U.S. dollar claims will receive 100% of their loan balance, while cryptocurrency creditors will bear the financial shortfall.
According to Bloomberg, DCG may appeal the ruling, but it remains unclear what legal justification they would have given the significant asset shortfall.
Gemini Shares Feedback to Earn Creditors
Gemini, the exchange owned by the Winklevoss twins, welcomed the ruling and clarified that it does not affect the previously approved global settlement among Gemini, Genesis, and other creditors in the Genesis Bankruptcy.
The company stated that approximately 97% of the owed funds will be initially repaid. The timeline is now set for the end of May according to the trading platform.
These payments will be made in-kind, meaning that customers who deposited one Bitcoin into Gemini Earn will receive that same BTC back, rather than the U.S. dollar equivalent of the token at a specific date.
“While this is a welcome decision for Genesis creditors, it does not impact the global settlement among Gemini, Genesis, and other creditors in the Genesis Bankruptcy previously approved by the Bankruptcy Court,” Gemini said in its announcement.
Genesis’ approach to bankruptcy response differs from that of FTX. According to the current plan, FTX will reimburse its customers based on the dollar value of their claims at the time FTX filed for bankruptcy.
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