Genesis Global Capital Repayment Plan Approved
Crypto lender Genesis Global Capital has received court approval to begin a $3 billion repayment plan to its creditors after filing for bankruptcy earlier this year. The decision also revealed that Genesis’s parent company, Digital Currency Group (DCG), will not be receiving any value from the bankruptcy payout plan.
US Court Grants Approval for Genesis Repayment Plan
Judge Sean Lane of the US Bankruptcy Court, Southern District of New York, granted approval for Genesis to settle its debts with its claimants. This came after the company filed for bankruptcy in January 2023 following the collapse of the FTX crypto exchange and Alameda Research trading arm.
- Genesis Global Capital filed for bankruptcy in January 2023
- A $3 billion repayment plan was proposed to settle debts
- Digital Currency Group will recover no value from the plan
Genesis Lending Platform Closure
Genesis Global Capital, a crypto lending platform, shut down as a result of the FTX collapse, where it had lent millions to Alameda Research in unsecured loans. According to reports, Genesis also sent $2.4 billion to Three Arrows Capital, a crypto hedge fund that was ordered to liquidate in June 2022.
Controversy Over Repayment Plan
The proposed repayment plan aimed to provide customers with at least 77% of their deposits, but DCG opposed this, claiming it would overcompensate customers due to recent crypto asset appreciation. However, Judge Lane dismissed DCG’s objections, stating they had no stake in the repayment fund as junior creditors of Genesis.
- Genesis faced criticism over its proposed payout plan
- Judge Lane rejected DCG’s objections to the plan
- State and federal regulators take priority in repayment hierarchy
Ruling on DCG Involvement
The court ruled that DCG, as an equity holder in Genesis, would not receive sufficient value from the repayment fund after the creditors were settled, including regulators who hold a higher priority. The judge concluded that DCG’s objection lacked merit given the limited assets available for recovery.
Cryptocurrency Market Overview
The total cryptocurrency market cap currently stands at $2.27 trillion, showing a slight decrease of 0.25% based on the latest data from CoinMarketCap. This indicates a relatively stable market despite recent developments in the Genesis case.
Hot Take: Genesis Repayment Plan Approved
The court’s decision to approve Genesis’s repayment plan marks a significant step towards resolving the company’s bankruptcy and settling debts with creditors. While DCG will not benefit from the payout, the prioritization of creditor repayment underscore’s the legal process’s fairness and adherence to regulatory standards in the crypto industry.
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