Genesis Begins Repayment After Bankruptcy

A subsidiary of Barry Silbert's Digital Currency Group (DCG) that collapsed during the last crypto winter has started repaying its creditors after completing bankruptcy restructuring.

In a new press release, Genesis Global, along with affiliate companies, has already commenced the distribution of approximately $4 billion in digital assets and cash to creditors by the Chapter 11 bankruptcy plan.

Genesis says that, on average, creditors will recover 64% of their holdings on an in-kind and coin-by-coin basis. Bitcoin creditors will recover 51.28% in BTC while Ethereum (ETH) creditors will get 65.87%.

Meanwhile, altcoin creditors, except Solana holders, will receive an average of 87.65% recoveries. Solana creditors will recover nearly 30% of their holdings. US dollar and stablecoin creditors will recover 100% of their holdings to be paid in USD.

The statement says creditors may get additional recoveries after the initial distribution depending on the outcome of ongoing claims reconciliation, contractual rights against third parties, and litigation.

Litigation Fund Established

As part of the Plan, creditors have established a $70 million litigation fund to pursue causes of action against various third parties, including Digital Currency Group, Genesis' corporate parent.

The $70 million litigation fund will consist of $26 million in BTC, $13 million in ETH, and $31 million in USD.

Court Ruling and Objections

In February, DCG objected to the bankruptcy plan, saying it would give more excellent distribution to certain creditors and leave nothing for equity holders.

However, the court ruled that Genesis has "nowhere near enough assets" to allow the venture capital firm to recover from the bankruptcy.

Customer Funds Frozen Since 2022

Genesis put customer funds on hold in November 2022 after going bankrupt, which resulted in liquidity problems caused by the collapse of its crypto hedge fund, Three Arrows Capital.