Reportedly, a U.S. Bankruptcy Judge has authorized crypto lending business Genesis Global to repay almost $3 billion in cryptocurrencies and cash to its consumers.
Judge Sean Lane of the United States Bankruptcy Court rejected DCG’s objection and authorized Genesis’ Chapter 11 liquidation plan on Friday. Genesis reportedly filed for bankruptcy in January 2023, and the objection stemmed from claims that the company should have paid its creditors and consumers just the value of the cryptocurrency they had on hand at the time. But cryptocurrency values have soared since then.
Despite DCG’s protest, Judge Lane ordered that Genesis must pay off other creditors, including $32 billion in claims from federal and state financial authorities, before it can pay its owner. Lane stressed that DCG will not get any compensation since there are not enough assets.
Unfortunately, there isn’t enough bitcoin in the company’s wallet to pay out its obligations. Depending on how prices go in the future, Genesis said in February that it may pay out as much as 77% of claim values to clients.
While this is happening, the cryptocurrency exchange FTX is expected to pay out as much as $16.3 billion to its creditors. This is about $5.3 billion more than what is due. FTX filed for bankruptcy in November 2022. It is unusual for creditors in U.S. bankruptcy to recover even a portion of their claims, but FTX intends to pay interest to its 2 million clients.
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