A arrives at the US District Bankruptcy Court for the Southern District of New York in Manhattan, New York, US, on Jan 9, 2020.NEW YORK - Crypto lender Genesis Global received court approval on Friday to return about $3 billion in cash and cryptocurrency to its customers in a bankruptcy liquidation, leaving its owner, Digital Currency Group, with no recovery from the bankruptcy.
US Bankruptcy Judge Sean Lane approved Genesis' Chapter 11 liquidation plan and overruled an objection raised by DCG, which had argued that Genesis should pay its customers and creditors no more than what the crypto assets were valued at in January 2023, when Genesis filed for bankruptcy. Crypto prices have risen sharply since Genesis filed for bankruptcy, and DCG and Genesis disagreed over who should benefit from the rise in prices. Bitcoin, for example, was worth $21,084 in January 2023, compared with its current price of $67,000.
Lane rejected DCG's objection, ruling that even if customer claims were capped at the lower prices, Genesis would have to pay many other creditors, including federal and state financial regulators that had asserted $32 billion in claims, before it was able to give money to its equity owner DCG.Genesis is paying customers back in crypto where possible, but it does not have enough cryptocurrency to give back everything it owes.