Genesis Global and its related companies have successfully completed their bankruptcy proceedings and are now distributing $4 billion to their creditors. The process started on August 2nd, with over 100,000 creditors set to receive repayments after the company filed for bankruptcy in January 2023.
The recovery rates for creditors vary depending on the type of assets they hold. On average, creditors will receive 64% of the value of their assets before the bankruptcy. Bitcoin creditors will recover 51.28% of their assets, Ethereum creditors will receive 65.87%, and Solana creditors will get 29.58%.
Stablecoin and U.S. dollar creditors will fare the best, as they will recover 100% of their fiat-pegged tokens and cash. The repayments will be made in the form of the exact crypto assets deposited or in cash. Genesis recently moved $3 billion in cryptocurrencies, leading to the current payouts.
In a press release, Genesis stated that creditors may be entitled to additional recoveries in the future, depending on the results of ongoing claims reconciliation, contractual rights against third parties, and any litigation that may arise.
Genesis faced financial difficulties in 2022 due to issues in the wider crypto industry, particularly the fallout from Terra’s collapse. This had a ripple effect on various players in the digital asset markets, including Genesis. The situation led to the suspension of withdrawals and eventually the declaration of bankruptcy.
To help with its financial troubles, Genesis received assistance from its parent company, Digital Currency Group. However, this was not enough to overcome the challenges the company faced, especially in light of legal disputes with other entities like the crypto exchange Gemini. The New York Attorney General also took legal action against Genesis and DCG for misleading investors and falsifying financial statements, resulting in a $2 billion settlement.
As part of its restructuring plan, Genesis has set up a $70 million litigation fund to pursue legal action against third parties, including Digital Currency Group. The company is committed to continuing the legal battles to protect its interests as it moves forward from bankruptcy.