Genesis, an institutional lending platform that filed for bankruptcy in 2023, has completed its Chapter 11 restructuring plan, distributing approximately $4 billion in funds to creditors.
Points
- Genesis completes Chapter 11 restructuring, distributing $4 billion to creditors.
- Bitcoin creditors receive 51.28% recoveries, Ether creditors 65.87%.
- Most altcoin creditors get 87.65% recoveries, Solana creditors 29.58%.
- Stablecoin and cash creditors are eligible for 100% recovery.
- A $70 million litigation fund is established for further legal actions.
Genesis, the institutional lending platform that filed for bankruptcy in 2023, announced the completion of its Chapter 11 restructuring plan on August 2, disbursing approximately $4 billion to creditors. This marks a significant milestone in the company’s recovery process following the 2022 crypto contagion that severely impacted the market.
Distribution to Creditors
As part of the restructuring plan, Bitcoin （BTC） creditors will receive 51.28% recoveries in-kind, while Ether （ETH） creditors will receive 65.87% recoveries, also in-kind. Most altcoin creditors will receive 87.65% recoveries of their digital assets, with Solana （SOL） creditors being the notable exception, receiving a 29.58% recovery rate. Stablecoin and cash creditors are eligible to recoup 100% of their losses in US dollars, according to the restructuring plan.
A $70 million litigation fund has been established for creditors seeking further legal action against third parties related to the bankruptcy, such as Genesis’ parent company, Digital Currency Group （DCG）.
The Fallout from the 2022 Crypto Contagion
Genesis engaged in institutional lending by borrowing funds from firms like Gemini and lending them to companies like Three Arrows Capital. The default of Three Arrows Capital created a rift between Gemini co-founder Cameron Winklevoss and DCG CEO Barry Silbert. Winklevoss has publicly criticized Silbert, accusing him of fraud and mismanagement.
Genesis Settles with the SEC
Recently, Genesis agreed to a $21 million settlement with the Securities and Exchange Commission （SEC） for allegedly selling unregistered securities alongside the Gemini Earn program. Following the settlement, SEC chief Gary Gensler emphasized that all cryptocurrency lending providers and other digital asset services must comply with existing securities laws.
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