According to a recent Bloomberg report, Genesis, the institutional crypto lending firm that filed for bankruptcy in 2023, has announced the completion of its Chapter 11 restructuring plan. On August 2, the company revealed that it would distribute approximately $4 billion to creditors affected by the bankruptcy. This marks a great milestone in addressing the fallout from the 2022 crypto contagion.
The restructuring plan outlines specific recovery rates for different types of creditors. Bitcoin (BTC) creditors will receive 51.28% of their claims, paid out in BTC. Similarly, Ether (ETH) creditors are set to recover 65.87% of their claims in ETH. Altcoin creditors will receive a notable 87.65% recovery of their digital assets. However, Solana (SOL) creditors face a lower recovery rate of 29.58%, also paid out in SOL. Stablecoin and cash creditors will recover 100% of their losses in US dollars.
At the time of writing, Bitcoin is valued at $61,467.29 experiencing a 4.60% plummet in the past 24 hours while Ethereum dropped 5.47% and is priced at $2,977.87. Concurrently, Solana is priced at $148.90 at the time of writing and has dipped 8.99% in the last 24 hours.
Donald Trump To Solve US’ $35T Debt Crisis Using BitcoinAdditionally, Genesis has established a $70 million litigation fund for creditors seeking further legal action. This fund is intended for those pursuing claims against third parties involved in the bankruptcy, including Genesis’ parent company, Digital Currency Group (DCG). The creation of this fund signifies Genesis’ commitment to addressing ongoing disputes and facilitating potential recovery for affected parties.
Recently, wallets associated with Genesis Trading have conducted substantial transactions, moving 16.6K BTC, which is valued at $1.1 billion, and 166.3K ETH, amounting to $521.1 million. These transfers are likely linked to in-kind repayments to creditors, reflecting ongoing adjustments in their financial dealings.
The bankruptcy was triggered by the default of Three Arrows Capital, a major borrower. Consequently, this default led to disputes between Gemini co-founder Cameron Winklevoss and DCG CEO Barry Silbert. Winklevoss has accused Silbert of fraud and mismanagement of the corporate conglomerate.
Furthermore, Genesis recently settled with the Securities and Exchange Commission (SEC) for $21 million. This settlement addressed allegations of selling unregistered securities through the Gemini Earn program. SEC Chief Gary Gensler has emphasized that all crypto lending services must comply with existing securities laws.
