What To Know
- One of the most significant crypto lenders, Genesis Global, will be able to disburse to its customers over $3 billion in cash and cryptocurrency after being granted court approval to liquidate its assets by a judge in the bankruptcy process.
- The speedy surge in cryptocurrency rates that Genesis enjoyed after the announcement for the Genesis bankruptcy created a conflict between Genesis and DCG over whether Genesis or DCG deserved the profit.
- It admits that the number of cryptocurrency assets available is inadequate to cover all claims fullyGenesis attorney Sean O’Neal dismissed DCG’s argument that clients could be considered as having been paid-in-full according to the crypto prices on 1st of January 2023 which have since been proven invalid.
One of the most significant crypto lenders, Genesis Global, will be able to disburse to its customers over $3 billion in cash and cryptocurrency after being granted court approval to liquidate its assets by a judge in the bankruptcy process. With this decision, the ruling parent company, Digital Currency Group (DCG), can not claw back any assets from bankruptcy.
Court Approval and The Evaluation Of The Company Value
Genesis’ Chapter 11 liquidation plan received the green-light on Friday by U. S. Bankruptcy Judge Sean Lane. This decision came through the DCG’s objection, stating that the assets’ valuation should be against their prices on January 2023, the time when Genesis was declared bankrupt. Bitcoin’s value was $21,084 at that time which was very low in comparison to its current worth ($67,000).
Rising Crypto Prices and Whether It is an Allocation or Not
The speedy surge in cryptocurrency rates that Genesis enjoyed after the announcement for the Genesis bankruptcy created a conflict between Genesis and DCG over whether Genesis or DCG deserved the profit. The Judge, Lane, finally ruled against the DCG’s objection, and declared that the claims of customers should not be limited at the valuations of January 2023. Then, he explained that Genesis should have funds paid to the other creditors, such as federal and state financial regulators with $32 billion in claims, before any dispersal to DCG.
Genesis’ Payment Plan
Genesis aims to satisfy customer’s request of receiving payments in crypto wherever applicable. Furthermore, it admits that the number of cryptocurrency assets available is inadequate to cover all claims fullyGenesis attorney Sean O’Neal dismissed DCG’s argument that clients could be considered as having been paid-in-full according to the crypto prices on 1st of January 2023 which have since been proven invalid.
By February of this year, Genesis had estimated that it might pay back between 77% and 100% of the value of the customers’ claims depending on fluctuation in the future cryptocurrency market pricing.
DCG’s Response
DCG refused to comment on the court’s verdict later at the night time on Friday.
The permission signifies a pivotal point in the bankruptcy process of Genesis Global, however the complexities and the challenges are still around in the emerging cryptoenvironment.
News source: Reuters
