Genesis Global Secures Court Approval on Bankruptcy Distribution Plans

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In a major victory against Digital Currency Group (DCG), Judge Sean Lane has given the green light to Genesis Global Capital’s bankruptcy repayment plan, ensuring that its customers will be repaid. 

This approval marks a significant milestone for Genesis Global and represents a positive outcome for all parties involved.

Genesis Global Bankruptcy: The genesis of the story 

Genesis Global is a financial company that has been a prominent player in the crypto industry, operating as a subsidiary of Digital Currency Group (DCG). 

It provides a range of services such as facilitating transactions and providing liquidity for institutional clients. 

After the FTX Derivatives Exchange collapse, Genesis Global temporarily stopped withdrawals in November 2022. However, its financial challenges persisted, which ultimately resulted in the need to file for bankruptcy in January 2023.

The firm found itself indebted to a significant number of creditors, including 50 prominent entities featuring Gemini Trust Company, with the total debt exceeding $3.5 billion. 

Genesis Global predicament continues

Genesis Global’s bankruptcy marked the culmination of a significant trend within the crypto industry, as several major firms like Voyager Digital, FTX, among others faced similar circumstances during that period.

Distributing funds to creditors has proven challenging for the lending firm, facing two major obstacles. The first hurdle arises from a claim by its parent company, DCG, which has complicated the process and caused additional delays.

Furthermore, the involvement of Gemini Earn has added to the distribution challenges and complexity of the bankruptcy proceedings, impeding the smooth resolution of the situation.

Given these challenges, the firm is struggling to devise a repayment strategy for its customers, as the initial plan to recover their assets was rejected

Additionally, the number of creditors facing the troubled crypto lending firm has grown, now including the U.S. regulatory body, the United States Securities and Exchange Commission (SEC). 

Genesis Global: At long last, triumph achieved

Amidst the ongoing issues, Gemini Trust Company has sued DCG for having the intention of leaving Genesis creditors high and dry. The plaintiff accused the defendant of alleged manipulation and false claims in the recovery plan. 

As if things weren’t complicated enough, Gemini and Genesis are now locked in a lawsuit over the ownership of more than 60 million GBTC shares used as collateral for loans. 

The digital currency broker, now defunct, had to sell off its assets in Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETH), and Grayscale Ethereum Classic Trust (ETCG) as it had no other option.

The New York Attorney General (NYAG) also joined the fray and sued Genesis Global. Judge Lane has now approved a settlement payment to be made to the NYAG, which will be used to reimburse Gemini Earn customers.

This decision is a major victory for Genesis and its customers, as it brings great relief. Excitingly, DCG, the venture capital firm, recently announced that it has fulfilled all of its short-term loan obligations to Genesis.

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