Genesis Trading Asset Transfer: $3B to be Returned to Customers
Genesis Trading, a major player in the cryptocurrency market, recently made significant asset transfers in preparation to return $3 billion to its customers. The company transferred $2.12 billion in Bitcoin (32,256 BTC) and $838 million in Ethereum (256,775 ETH) to various addresses over the past three days.
This move is part of Genesis Trading’s bankruptcy reorganization plan, which aims to manage creditor repayments effectively. The company has faced financial turmoil following the collapse of the FTX exchange and Three Arrows Capital, leading to a halt in withdrawals and a Chapter 11 bankruptcy filing in January 2023.
Court-Approved Settlement to Cover 77% of Customer Claims
Genesis Trading recently reached a settlement plan approved by the court to return $3 billion to its customers. This scheme will cover approximately 77% of the total value of a customer’s claim, providing much-needed relief to those affected by the company’s financial difficulties.
After filing for bankruptcy, Genesis Trading’s claims initially traded at a fraction of their value on the claims trading platform. However, the value of these claims has increased significantly, with larger claims now trading at up to 110% of their value.
Digital Currency Group (DCG) Excluded from Settlement
While customers stand to benefit from Genesis Trading’s settlement plan, the company’s parent company, Digital Currency Group (DCG), will not receive any compensation. The court determined that the value of Genesis’ estate was insufficient to provide DCG with any recovery as a shareholder.
DCG’s failed attempt to cap customer claims at the value of cryptocurrencies in January 2023 played a role in this decision. Additionally, DCG assumed a significant amount of debt incurred by Genesis during the bankruptcy of Three Arrows Capital, further impacting their exclusion from the settlement.
