Bankrupt cryptocurrency lender Genesis Global Capital, along with sister companies Genesis Global Holdco and Genesis Asia Pacific, completed its restructuring and has begun the distribution of around $4 billion to creditors, the firm announced Friday.
Per the initial distribution, creditors will receive a portion of recovered assets as valued on an in-kind basis as follows: Bitcoin creditors will receive 51.28% recoveries, Ether creditors will receive 65.87% recoveries, and Solana creditors will receive 29.58% of recoveries. Other altcoin creditors will receive 87.65% recoveries, also on an in-kind basis. U.S. dollar and stablecoin creditors will receive 100% recoveries.
Following the initial distribution, creditors will be entitled to additional recoveries depending on the outcome of ongoing claims reconciliation, contractual rights against third parties, and litigation.
Genesis filed for bankruptcy early last year. The crypto lender was ensnared by loans it had made to FTX sister company Alameda Research, which filed for bankruptcy in November 2022. In July 2022, Genesis also suffered a $2.4 billion hit when crypto hedge fund Three Arrows Capital defaulted on a loan from the firm following the Terra ecosystem collapse.
Shortly after FTX filed for bankruptcy, Genesis and crypto exchange Gemini halted withdrawals from their joint-run Gemini Earn program, in which Gemini customers could lend assets to Genesis in exchange for interest.
That program was then the subject of scrutiny and litigation from regulators, who said that through it, Genesis and Gemini sold unregistered securities. Genesis settled with the Securities and Exchange Commission for $21 million in February. New York Attorney General Letitia James accused Genesis’ parent company, Digital Currency Group and Gemini of fraud, and the companies settled for $2 billion in May.
As part of Genesis’ bankruptcy plan, creditors have established a $70 million litigation fund to pursue legal action toward various third parties, including parent company DCG. The litigation fund is comprised of $26 million in BTC, $13 million in ETH, and $31 million in USD.
A spokesperson for Genesis did not return a request for further comment.
