Genesis, an institutional lending platform, successfully completes its Chapter 11 restructuring, disbursing $4 billion to creditors and establishing a litigation fund for further legal actions.
Points
- Genesis completes Chapter 11 restructuring and disburses $4 billion to creditors.
- A $70 million litigation fund is set up for further legal actions against third parties.
- The restructuring follows significant fallout from the 2022 crypto contagion.
- Genesis settles with the SEC, emphasizing compliance with securities laws.
Genesis, an institutional lending platform that declared bankruptcy in 2023, has successfully concluded its Chapter 11 restructuring plan. On August 2, the company announced the disbursement of approximately $4 billion to creditors, marking a significant step in its recovery process.
The restructuring follows the fallout from the 2022 crypto contagion, which saw Genesis borrow funds from firms like Gemini and lend them to others, including Three Arrows Capital. The collapse of these counterparties led to severe financial strain on Genesis, ultimately resulting in its bankruptcy filing.
As part of the restructuring, Genesis has also established a $70 million litigation fund. This fund is intended to support creditors seeking further legal action against third parties involved in the bankruptcy, such as Genesis’ parent company, Digital Currency Group （DCG）. This move aims to provide additional avenues for creditors to recover their losses.
The restructuring process included a settlement with the Securities and Exchange Commission （SEC）. Genesis agreed to comply with existing securities laws, with SEC chief Gary Gensler emphasizing the need for all cryptocurrency lending providers to adhere to these regulations.
“Following the settlement, SEC chief Gary Gensler remarked that all cryptocurrency lending providers and other digital asset services need to comply with existing securities laws.”
The completion of the restructuring plan and the subsequent disbursement of funds represent a significant milestone for Genesis. It highlights the company’s commitment to addressing its financial obligations and restoring stability within the market.
解説
- Genesis’s restructuring and the establishment of a litigation fund reflect the complexities and challenges faced by crypto firms in maintaining financial stability.
- The settlement with the SEC underscores the importance of regulatory compliance in the evolving cryptocurrency landscape.
- The successful completion of the restructuring plan may serve as a precedent for other crypto firms facing similar challenges, emphasizing the need for transparency and accountability in the industry.