Outside Source
Genesis Global and affiliated entities have begun disbursing $4 billion in creditor payouts following the completion of their restructuring process.
According to an Aug. 2 statement, crypto lender Genesis Global started repayments to over 100,000 creditors after declaring bankruptcy in January 2023.
The recovery rates vary by asset type, with Genesis creditors will receiving an average of 64% of pre-bankruptcy value. The lender disclosed 51.28% recovery for Bitcoin (BTC) creditors, 65.87% for Ethereum (ETH) creditors, and 29.58% for Solana (SOL) assets.
Stablecoin and U.S. dollar creditors fare the best, recovering 100% of their fiat-pegged tokens and cash. The repayments are divided between in-kind (the exact crypto asset deposited) and cash. This follows reports of Genesis moving $3 billion in cryptocurrencies.
The Genesis press release stated, “Creditors will be entitled to additional recoveries following the initial distribution, depending on the results of ongoing claims reconciliation, contractual rights against third parties, and litigation.”
Genesis bankruptcy
Genesis initially collapsed in 2022 due to contagion in the crypto industry. The fallout from Terra’s implosion reverberated through digital asset markets, impacting various providers.
The Terra saga crippled hedge fund Three Arrows Capital and crypto exchange FTX, ultimately forcing Genesis to halt withdrawals and declare bankruptcy.
The firm received financial aid from parent company Digital Currency Group, but DCG’s promissory note could not abate the beleaguered business and legal tussles with crypto exchange Gemini heaped on turbulent times.
New York Attorney General Letitia James also sued DCG and the crypto lender for misleading investors and falsifying financial statements. The matter settled for $2 billion between the crypto lender and NY authorities. Genesis said its restructuring plan includes a $70 million litigation fund “to pursue causes of action against various third parties, including Digital Currency Group” as protected court battles continued.
This article first appeared at crypto.news
