{"id":20888,"date":"2024-05-20T16:00:24","date_gmt":"2024-05-20T13:00:24","guid":{"rendered":"https:\/\/coinengineer.io\/?p=20888"},"modified":"2024-05-20T14:07:27","modified_gmt":"2024-05-20T11:07:27","slug":"genesis-bankruptcy-plan-approved-by-u-s-court","status":"publish","type":"post","link":"https:\/\/coinengineer.net\/blog\/genesis-bankruptcy-plan-approved-by-u-s-court\/","title":{"rendered":"Genesis Bankruptcy Plan Approved by U.S. Court"},"content":{"rendered":"

The bankruptcy plan of Genesis<\/strong>, the bankrupt cryptocurrency lender that failed following the collapse of the Terra\/Luna ecosystem and Three Arrows Capital, was approved by a U.S. court<\/a> yesterday, overriding the opposition of Genesis<\/strong> owner Digital Currency Group<\/a> (DCG).<\/p>\n

Before deciding in favor of the plan, which would repay creditors nearly $3 billion in cash and assets, US bankruptcy judge Sean Lane dismissed objections from DCG, the Genesis Crypto Creditors Ad Hoc Group<\/strong>, and the Office of the United States Trustee.<\/p>\n

Bypassing almost a year and a half of gains across the cryptocurrency industry, DCG had contended that claims should be valued in U.S. dollars at the time of the company’s bankruptcy filing in January 2023.<\/p>\n

“DCG has objected to a plan in which it has no economic stake,”<\/em> Judge Lane wrote in dismissing the complaint. “After unsecured creditors are satisfied, the record here unequivocally shows that the debtors’ estates are not worth enough to give DCG a recovery as an equity holder.”\u00a0<\/em><\/p>\n

Simply put, creditors owing cryptocurrencies will be handled differently than creditors owing U.S. dollars under the plan, which calls for “a multi-step process that allocates assets to creditors by claim denomination and values these assets for distribution purposes.”<\/p>\n

Judge Lane further said, “Due to the increase in price of digital assets after the time a resolution was reached, it is currently anticipated that those creditors whose claims are denominated in U.S. dollars will be receiving 100% of their loan balance (deferring payment of post-petition interest),”<\/em> whereas creditors with claims in cryptocurrency will bear the shortfall in funds.<\/p>\n

Although DCG might be able to contest the decision, Bloomberg reports, it’s not obvious what legal grounds they would have given the severe asset deficiency.<\/p>\n

After learning of the verdict, Winklevoss twin-owned exchange Gemini<\/strong> issued a statement describing it as a “welcome decision,” but adding that “it does not impact the global settlement among Gemini<\/strong>, Genesis<\/strong>, and other creditors in the Genesis<\/strong> Bankruptcy previously approved by the Bankruptcy Court.”<\/em><\/p>\n

The company said that as part of the Gemini Earn<\/strong> agreement, creditors will start getting the assets owing to them at the beginning of each month. The firm added that initially, around 97% of outstanding amounts will be reimbursed in-kind, meaning that a customer who placed one bitcoin into Gemini Earn<\/strong> will get that bitcoin back instead of the token’s U.S. dollar worth at that time.<\/p>\n

This distinguishes Gemini’s<\/strong> bankruptcy reaction from FTX’s, which, per the present plan, will pay back consumers the dollar amount of their claims at the time FTX filed for bankruptcy.<\/p>\n","protected":false},"excerpt":{"rendered":"

The bankruptcy plan of Genesis, the bankrupt cryptocurrency lender that failed following the collapse of the Terra\/Luna ecosystem and Three Arrows Capital, was approved by a U.S. court yesterday, overriding the opposition of Genesis owner Digital Currency Group (DCG). Before deciding in favor of the plan, which would repay creditors nearly $3 billion in cash<\/p>\n","protected":false},"author":6,"featured_media":20889,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[2059,1106],"class_list":["post-20888","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-gemini","tag-genesis"],"yoast_head":"\nGenesis Bankruptcy Plan Approved by U.S. Court - Coin Engineer<\/title>\n<meta name=\"description\" content=\"U.S. court approves Genesis' bankruptcy plan, repaying creditors $3B in cash and assets, despite opposition from owner Digital Currency Group\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/coinengineer.net\/blog\/genesis-bankruptcy-plan-approved-by-u-s-court\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Genesis Bankruptcy Plan Approved by U.S. Court - 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