Genesis creditors closer to recovering $630 million in funds lost to bankrupt lender

• Genesis Global and its parent company DCG have agreed to resolve creditor claims.
• The agreement from the court filing on Tuesday shows that unsecured creditors are set to recover between 70% to 90% of their USD claims.
• Digital asset claims will be recovered by 65% to 90% on an in-kind basis, according to the bankruptcy court proceedings.

Genesis Global has reached an agreement with its parent company, the Digital Currency Group, on a plan to pay back $630 million in unsecured loans for potential claims. The agreement is beneficial to the bankrupt lender’s creditors as it could result in a 70% to 90% recovery of USD claims. 

The court filing in the US bankruptcy court in the Southern District of New York shows details of the agreement between the two entities.

Also read: Genesis creditors won’t get full value of their claims, bankrupt crypto lender files updated plan

Genesis Global to pay back creditors claims

According to a Reuters report and court filings from Tuesday, the bankrupt crypto lender Genesis has reached an agreement with Digital Currency Group to pay back its creditors. As of May, the lender was expected to pay back $630 million in unsecured loans. However, bankruptcy court proceedings have slowed down the timeline of paying back users.

Genesis first halted withdrawals in November 2022, along with Samuel Bankman Fried’s FTX exchange and Alameda Trading firm’s collapse. Genesis has been under bankruptcy protection since then, working out a plan to pay back creditors.

The latest filing has the agreement and the plan that could lead to a recovery of between 70% and 90% of US Dollar equivalent for unsecured creditors and between 65% and 90% of digital asset or in-kind recovery. The lender’s creditors have waited months for a resolution of the claims, and recent development brings them one step closer to making them whole. 

Pay back agreement from Tuesday’s filings

Bankrupt crypto lender Genesis owes over $3.5 billion to top 50 creditors and parent DCG has two types of existing liabilities: 

• $630 million in unsecured loans that were due in May 2023 
• $1.1 billion under unsecured promissory notes due in 2032

The filing contains a new partial repayment agreement that sets the payback process in two tranches. Approximately $328.8 million will be paid within the next two years, while $830 million in the next seven years. 

Genesis’ parent company will also pay back $275 million in four installments for the May 2023 maturity loans, according to the court’s filing.

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