A U.S. bankruptcy court has approved the liquidation plan of crypto lender Genesis Global, paving the way for approximately $3 billion to be returned to its creditors.
Judge Sean Lane, in a memorandum decision, deemed Genesis’ Chapter 11 liquidation plan reasonable and proposed in good faith.
He stated, “The Court finds that the Plan should be confirmed because it satisfies all requirements of applicable law. Broadly speaking, the Plan provides for all of the Debtors’ limited assets to be paid to its unsecured creditors.”
However, the ruling does not favor Genesis’ parent company, Digital Currency Group (DCG), which contested the bankruptcy plan in a motion filed in February.
DCG argued that the plan favored certain creditors over equity holders.
In response, Judge Lane noted DCG’s objection, highlighting that the plan offered no economic stake to DCG.
He emphasized the lack of assets available to enable DCG’s recovery from the bankruptcy, stating, “There are nowhere near enough assets to provide any recovery to DCG in these cases.”
The freeze on Genesis customer funds dates back to November 2022, when the crypto lender suspended withdrawals due to liquidity issues triggered by the collapse of crypto hedge fund Three Arrows Capital.
