According to a creditor, the revised restructuring plan that Genesis, Digital Currency Group, and creditors have suggested will result in creditors receiving at least 80% of their money back.
Genesis Global’s crypto trading and market-making business will eventually be sold as part of restructuring efforts, the company stated on February 6 after reaching an “agreement in principle” with Digital Currency Group (DCG) and its creditors.
Additionally, Gemini, a cryptocurrency platform, would provide $100 million under the terms of the agreement to help its Gemini Earn customers whose funds are held with the insolvent company. DCG would also give Genesis Global Holdco, Genesis’ holding company, its equity stake in Genesis Global Trading, the company’s brokerage arm.
All those companies which are linked to the company would be placed within the same holding firm as a result of the deal.
The scheme “has a recovery rate of approximately $0.80 per dollar deposited, with a path to $1.00 for Genesis creditors”, according to a user update from Donut on February 6.
The amount that can be recovered, it was said, is dependent on the “equity note, realized liquidation prices and considers the unknown costs associated with the remainder of this bankruptcy.”
Due to the collapse of the FTX Derivatives Exchange, the cryptocurrency business suspended withdrawals on its platform back in November 2022, and up until this point, the company has been mired in issues beyond its control.
On January 19, the cryptocurrency brokerage firm filed for Chapter 11 bankruptcy to assist the company in restructuring its operations so as to offer value to all of its users.
The firm’s bankruptcy application, which was delivered to the U.S. bankruptcy court for the Southern District of New York, listed 50 of the firm’s top creditors and stated that the firm owes them a combined total of more than $3.5 billion.
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