Written by Dietrich Knaut
NEW YORK (Reuters) – Cryptocurrency lender Genesis Global received court approval on Friday to return about $3 billion in cash and cryptocurrencies to customers in a bankruptcy liquidation, but its owner Digital Currency – The group was unable to recover from bankruptcy.
U.S. Bankruptcy Court Judge Sean Lane approved Genesis' Chapter 11 liquidation plan, ruling that Genesis must pay customers and creditors more than the valuation of its crypto assets in January 2023, when Genesis filed for bankruptcy. The DCG's appeal, which claimed that there was no such thing, was dismissed. .
Cryptocurrency prices have risen sharply since Genesis filed for bankruptcy, and DCG and Genesis disagree over who should benefit from the price increases. For example, Bitcoin's current price is $67,000, but it was worth $21,084 in January 2023.
Lane rejected DCG's objections and said that even if customers' bills were capped at a lower price, Genesis had to file a $32 billion claim against the federal and federal government before funding the company. It ruled that it would have to pay a number of other creditors, including state financial regulators. Shareholder DCG.
“DCG simply does not have sufficient assets to provide recovery in these cases,” Lane wrote.
Genesis is repaying customers in cryptocurrencies whenever possible, but it doesn't have enough cryptocurrencies to repay everything it owes.
Genesis lawyer Sean O'Neill said Friday that the company disagrees with DCG's argument that customers could be paid “in full” based on the January 2023 drop in cryptocurrency prices.
“We do not agree with the idea that the amount claimed is limited to the value on the date of the petition,” O'Neill said.
Genesis estimated in February that it could pay customers up to 77% of their claims, depending on future price changes.
DCG could not be reached for comment late Friday.
(Reporting by Dietrich Knauth; Editing by Sandra Maler and Leslie Adler)
