Genesis Global, a financial company operating as Digital Currency Group (DCG) subsidiary, has successfully concluded its restructuring process and is now set to distribute $4 billion worth of assets to its remaining creditors.
Genesis Global Begins distribution in Crypto and Cash
According to a press release, the initial distribution will see creditors receiving an average of 64% recoveries on an in-kind, coin-by-coin basis. This means that creditors will be compensated in the same type of cryptocurrency they originally held, ensuring a more direct and equitable distribution of assets.
Bitcoin creditors will receive 51.28% of their bitcoin back, while Ethereum creditors will receive 65.87% recoveries, though it will vary coin by coin. Also, the company mentioned that altcoin creditors (other than Solana) will receive 87.65%, and Solana creditors will receive 29.58% of their cryptocurrency assets. However, US dollar and stablecoin creditors will receive 100% recoveries in US dollars.
Similarly, after the first distribution, creditors may receive further payments based on the outcome of ongoing claims verification, contractual claims against third parties, and legal proceedings. As Genesis Global proceeds with its asset distribution, it will likely continue to focus on regaining stability and trust within the market.
Genesis Files For Bankruptcy Protection
It became tough for Genesis when Sam Bankman-Fried resigned and FTX filed for Chapter 11 bankruptcy protection in a United States court. After suspending lending and withdrawal activities on its platform, Digital Currency Group (DCG) took on Genesis’s $1 billion debt. Also, Genesis had some troubles with the Winklevoss brothers Gemini in 2022 over the latter’s Earn program.
The company ended up filing for bankruptcy protection in January 2023. At that time, TheCoinRise reported the renowned crypto brokerage company owes 50 top creditors over $3.5 billion. Amidst the ongoing issues, Gemini Trust Company sued DCG for leaving Genesis creditors high and dry. The plaintiff accused the defendant of alleged manipulation and false claims in the recovery plan.
Gemini Earn to Return Funds After Genesis Bankruptcy Approval
Recall that in May, Gemini Earn announced its plan to return customers’ assets following the approval of Genesis’ bankruptcy plan. This move comes after the United States court gave the green light to Genesis. The approved plan is to distribute approximately $3 billion in cash and assets to creditors.
Meanwhile, the approved plan introduces a multi-step process for asset allocation. There is discrimination between creditors owed cryptocurrency and those owed U.S. dollars. While creditors with claims in U.S. dollars will receive 100% of their loan balance, those with crypto claims will bear a shortfall in funds.
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