Genesis Global Completes Bankruptcy Restructuring, Begins Distributing $4 Billion to Creditors
Crypto lender Genesis Global has successfully completed its Chapter 11 bankruptcy restructuring plan and has begun distributing approximately $4 billion in digital assets and cash to creditors. The restructuring plan outlines the recovery rates for different types of creditors, with Bitcoin creditors set to receive 51.28% of their losses in the form of BTC, Ether creditors receiving 65.87% in ETH, and most altcoin creditors receiving 87.65% of their digital assets.
However, SOL holders will only receive a 29.58% recovery rate, payable in-kind. Stablecoin and cash creditors, on the other hand, will be able to reclaim 100% of their losses in US dollars. Additionally, a $70 million litigation fund has been established for creditors looking to take legal action against third parties involved in the bankruptcy, such as Genesis’ parent company Digital Currency Group.
Genesis Global filed for bankruptcy in January 2023 after mismanaging funds through its Gemini Earn program, which allowed customers to lend their cryptocurrency and receive interest payments. The company defaulted on loans totaling approximately $1 billion from Earn customers, leading to its bankruptcy filing. The New York Attorney General has since recovered $50 million from Gemini Trust to repay defrauded investors, in addition to a $2 billion settlement with Genesis Global Capital.
In March 2024, Genesis also agreed to pay a $21 million civil fine to settle charges of illegally selling securities through its crypto lending program. The completion of the bankruptcy restructuring plan marks a significant step forward for Genesis Global and its creditors as they work towards resolving the fallout from the company’s financial mismanagement.
