The bankruptcy repayment plan of Genesis, which is currently undergoing bankruptcy proceedings, has been opposed by its parent company, Digital Currency Group (DCG). DCG insists that the amount Genesis repays to its customers and creditors should not exceed the value of the cryptocurrency assets at the time of Genesis’ bankruptcy application in January 2023.
According to Reuters and Cointelegraph, DCG formally filed a motion with the court on Monday, expressing its opposition to Genesis’ repayment plan. DCG argues that Genesis violates US bankruptcy law by proposing to pay creditors amounts that exceed their legitimate claims and insists that the repayment amount to customers and creditors should not exceed the value of the cryptocurrency assets at the time of Genesis’ bankruptcy application in January 2023.
It is understood that Genesis and the main group of creditors hope to value tokens such as Bitcoin and Ethereum closer to their current prices in the repayment plan, to reflect the increased value of digital assets during the bankruptcy process. However, DCG claims that the assets currently held by Genesis are sufficient to fully repay the creditors based on the cryptocurrency asset valuation at the time of the bankruptcy in January 2023 and that there are still remaining assets to be paid to DCG.
If the proposed repayment plan values the assets closer to their current prices, Genesis’ repayment amount is expected to exceed the total amount claimed at the time of the bankruptcy application by several hundred million dollars. DCG claims that such a plan heavily favors a group of minority creditors and violates bankruptcy law.
According to CoinGecko data, the current price of BTC is about $42,925, an increase of over 90% compared to the price of approximately $22,677 in January last year. The current price of ETH, at $2,361, has also appreciated by over 50% compared to the bankruptcy price of $1,550.
In the wake of the liquidity crisis triggered by the collapse of three major players, Three Arrows Capital and FTX, in November 2022, Genesis, a cryptocurrency lending institution that officially filed for bankruptcy and reorganization in January 2023, faced opposition from its parent company, Digital Currency Group (DCG), regarding its latest bankruptcy reorganization plan.
According to reports from Reuters and Cointelegraph, DCG formally submitted a motion to the court on Monday, expressing its opposition to Genesis’ repayment plan. DCG argued that Genesis violated US bankruptcy law by proposing to pay creditors amounts that exceed their legitimate claims and insisted that the amount Genesis repays to its customers and creditors should not exceed the value of the cryptocurrency assets at the time of Genesis’ bankruptcy application in January 2023.
DCG: Genesis repayment should be based on the value of cryptocurrency assets on the bankruptcy date
It is understood that Genesis and the main group of creditors hope to value tokens such as Bitcoin and Ethereum closer to their current prices in the repayment plan, to reflect the increased value of digital assets during the bankruptcy process. However, DCG claims that the assets currently held by Genesis are sufficient to fully repay the creditors based on the cryptocurrency asset valuation at the time of the bankruptcy in January 2023 and that there are still remaining assets to be paid to DCG.
If the proposed repayment plan values the assets closer to their current prices, Genesis’ repayment amount is expected to exceed the total amount claimed at the time of the bankruptcy application by several hundred million dollars. DCG claims that such a plan heavily favors a group of minority creditors and violates bankruptcy law.
According to CoinGecko data, the current price of BTC is about $42,925, an increase of over 90% compared to the price of approximately $22,677 in January last year. The current price of ETH, at $2,361, has also appreciated by over 50% compared to the bankruptcy price of $1,550.
In the wake of the liquidity crisis triggered by the collapse of three major players, Three Arrows Capital and FTX, in November 2022, Genesis, a cryptocurrency lending institution that officially filed for bankruptcy and reorganization in January 2023, faced opposition from its parent company, Digital Currency Group (DCG).
According to reports from Reuters and Cointelegraph, DCG formally submitted a motion to the court on Monday, expressing its opposition to Genesis’ repayment plan. DCG argued that Genesis violated US bankruptcy law by proposing to pay creditors amounts that exceed their legitimate claims and insisted that the amount Genesis repays to its customers and creditors should not exceed the value of the cryptocurrency assets at the time of Genesis’ bankruptcy application in January 2023.
It is understood that Genesis and the main group of creditors hope to value tokens such as Bitcoin and Ethereum closer to their current prices in the repayment plan, to reflect the increased value of digital assets during the bankruptcy process. However, DCG claims that the assets currently held by Genesis are sufficient to fully repay the creditors based on the cryptocurrency asset valuation at the time of the bankruptcy in January 2023 and that there are still remaining assets to be paid to DCG.
If the proposed repayment plan values the assets closer to their current prices, Genesis’ repayment amount is expected to exceed the total amount claimed at the time of the bankruptcy application by several hundred million dollars. DCG claims that such a plan heavily favors a group of minority creditors and violates bankruptcy law.
According to CoinGecko data, the current price of BTC is about $42,925, an increase of over 90% compared to the price of approximately $22,677 in January last year. The current price of ETH, at $2,361, has also appreciated by over 50% compared to the bankruptcy price of $1,550.
In an effort to reach a settlement with its creditors, Genesis is seeking court approval to sell its existing assets, including nearly $1.4 billion worth of GBTC, through a liquidation process. The company reportedly owes its top 50 creditors over $3.5 billion, including companies like Gemini.
Gemini has submitted documents to the court in support of Genesis’ repayment plan, stating that the plan provides a repayment path for customers whose assets have been locked up for over 16 months.
However, it is worth noting that in a recent bankruptcy case involving FTX, the FTX liquidation team proposed using the “fair and equitable” value as of the bankruptcy date of November 11, 2022, which sparked complaints from dozens of angry creditors. The US bankruptcy judge overseeing the FTX reorganization rejected the creditors’ request to value their assets held on the platform based on current prices, stating that the US bankruptcy law is “very clear” and that valuing customer claims based on prices at the time of bankruptcy is correct.
After reaching a settlement with the U.S. Securities and Exchange Commission (SEC) for $21 million, Genesis plans to seek court approval for its repayment plan at a hearing scheduled for February 14 in New York.