Bankruptcy claim trading platforms were initially pricing in 35% of claims would be repaid shortly after the insolvency was announcedGenesis recently secured court approval to distribute $3 billion in cash and crypto to its creditors, according to a recent filing, representing approximately 77% of the value of customer claims – however Digital Currency Group will not be included in the list of entities paid out.
In the immediate aftermath of the filing, the market was skeptical that customers would be made whole and the bankruptcy proceedings would be completed in an expedient manner. As of today, Genesis claims for bitcoin or ether are trading between 97-110% for claims over $10 million, while claims under $1 million are trading for between 74-94%.Claims for fiat currency or stablecoins in Genesis accounts are trading between 89-91% for accounts worth between $1-10 million, and between 73-88% for claims under $1 million.
DCG had previously argued for customer claims to be capped at the value of cryptocurrencies as of January 2023, which they believed would allow for full repayment to customers and potentially a recovery for DCG.with a 10-year promissory note, but this illiquid obligation did not cover the losses, leading to scrutiny of DCG's financial practices.
DCG and Genesis also had credit lines between the two companies, and Genesis ended up suing DCG over claims that the company missed payments on the loans it took., with DCG having paid $227.3 million so far and planning to pay another $275 million by April, to settle a lawsuit over $620 million in loans.in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin.