Genesis Global Receives Court Approval for $3 Billion Payout Amid Bankruptcy Proceedings

Genesis Global, a bankrupt cryptocurrency lender, has obtained court approval to distribute approximately $3 billion in cash and cryptocurrency to its creditors, following a decision by Judge Sean Lane on Friday, May 17. The repayment plan allows Genesis to release customer assets that have been frozen since November 2022 when the company ceased withdrawals amidst the collapse of several major cryptocurrency firms. Despite objections from its parent company, Digital Currency Group (DCG), regarding the valuation of assets, Judge Lane dismissed DCG's challenge, asserting that DCG lacked legal standing in the Chapter 11 proceedings. Due to significant creditor claims, DCG's equity stake is deemed essentially worthless, with Genesis required to prioritise payment to other creditors before distributing any funds to DCG. Genesis, facing creditor claims totaling $32 billion, has been undergoing liquidation efforts after filing for bankruptcy in January 2023 due to a liquidity crisis amid the crypto bear market. The lender aims to settle outstanding loans, including those owed to DCG, and end legal disputes to resolve its financial obligations.