The post Mt Gox-like Earthquake in Bitcoin and Cryptocurrencies: 3 Billion Dollar Distribution Approved appeared on BitcoinEthereumNews.com.

Genesis, along with its subsidiaries, received court approval to distribute $3 billion in cash and cryptocurrency to its creditors as part of a finalized bankruptcy liquidation plan. This payment represents approximately 77% of the value of customer claims. However, Genesis’ parent company, Digital Currency Group (DCG), will not be among the organizations receiving compensation. Genesis filed for Chapter 11 bankruptcy protection in New York in January 2023, citing significant losses from the collapses of Three Arrows Capital and FTX. At the time of filing, Genesis owed over $3.5 billion to its 50 largest creditors. Initially, there was skepticism in the market about the possibility of customers being fully compensated and bankruptcy proceedings being resolved quickly. In January 2023, bankruptcy claims marketplace Xclaim listed Genesis claims at just 35% of their value. Currently, Genesis claims for Bitcoin or Ethereum are trading between 97-110% for claims over $10 million and 74-94% for claims under $1 million. Fiat or stablecoin claims on Genesis accounts trade between 89-91% for accounts between $1-10 million and 73-88% for claims under $1 million. Despite these positive developments for creditors, DCG will not receive any payments. Judge Sean Lane stated in his decision: “The record here clearly establishes that there is insufficient value in the debtors’ estates to provide DCG with a recovery as an equity holder after the payment of unsecured creditors. Given the magnitude of the creditors’ claims, the Court found that DCG granted the creditors’ claims “Even if it is evaluated with the method suggested by DCG, it is clear that DCG, as an equity owner, will suffer billions of dollars in losses.” Previously, DCG had advocated limiting customer requests to the value of cryptocurrencies as of January 2023. They believed this would lead to full refunds to customers and potentially a recovery for DCG.…

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Filed under: News - @ August 3, 2024 7:26 pm