Genesis’ bankruptcy plan, including a $2 billion settlement with the New York Attorney General’s office, gets court approval. The bankrupt crypto lender is about to cough up $2 billion to victims of its alleged cryptocurrency fraud. This deal is the biggest of its kind against a crypto company by the state and gives some semblance of justice to the hundreds of thousands of investors who got fleeced, including at least 29,000 New Yorkers.
A Historic Settlement
New York Attorney General Letitia James said, “This historic settlement is a major step towards ensuring the victims who invested in Genesis have a semblance of justice.”
Translation: Genesis is getting a swift kick out of New York. James’s lawsuit, filed last October, accused Genesis of hiding over $1.1 billion in losses. Genesis didn’t admit or deny these claims but still found itself filing for Chapter 11 bankruptcy after the crypto market went belly up and FTX imploded.
Last Friday, the court approved Genesis’s Chapter 11 repayment plan, including the settlement with James’ office, and tossed out a legal challenge by Genesis’s parent company, Digital Currency Group (DCG). This paves the way for Genesis to finally return customer assets that have been locked up since November 2022.
Gemini Earn to Return 97% of Assets Owed
The court’s ruling also spells good news for Gemini Earn users. The Winklevoss twin-owned exchange announced it would start returning 97% of the assets owed to its customers by the end of the month. Customers will get their crypto back in-kind, meaning if you deposited one Bitcoin, you’ll get that same Bitcoin back, not its dollar value.
DCG argued that claims should be valued in U.S. dollars at the time of Genesis’s bankruptcy filing, conveniently bypassing a year and a half of crypto gains. Judge Lane nixed that idea, pointing out that creditors with claims in U.S. dollars will get 100% of their loan balance, while those with crypto claims will feel the pinch from the shortfall.
This settlement and repayment plan are crucial in untangling the mess left by Genesis’ collapse. Gemini hailed the court’s decision, emphasizing that it doesn’t affect the global settlement among Gemini, Genesis, and other creditors previously approved by the Bankruptcy Court. Gemini Earn customers can start getting their owed assets back, making this a rare win in the chaotic world of crypto bankruptcies.
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