JAKARTA - Genesis Global, a crypto lender who is experiencing bankruptcy, has finally received approval from the court to distribute around Rp45 trillion (equivalent to US$3 billion) to its creditors. This approval was granted by US Bankruptcy Judge Sean Lane last Friday.
This ruling means that Genesis' parent company Digital Currency Group (DCG) will not get any recovery from this bankruptcy process. DCG previously objected that payments to Genesis creditors should have been limited to crypto prices in January 2023, when Genesis filed for bankruptcy. At that time, the price of Bitcoin was at IDR 321 million (21.084 US Dollars). However, the price of Bitcoin has now risen to around IDR 1.018 billion (66.900 US Dollars).
"We don't agree that claims are limited to the value of the submission date," said Sean O'Neal, a lawyer representing Genesis. Judge Lane sided with Genesis, stating that although customer claims are limited to lower prices, the company still has to pay many other creditors.
SEE ALSO:
As a junior shareholder under the process of Chapter 11, DCG is at the bottom of the payments hierarchy. Lane stated that the recovery process should prioritize creditors' claims rather than share ownership by shareholders like DCG.
"The available assets are far from sufficient to provide DCG with recovery in this case," Lane said.
Genesis filed for bankruptcy in January 2023 after suspending withdrawals in November 2022 due to a liquidity crisis. The company owes more than IDR 52 trillion (USD 3.5 billion) to its top 50 creditors, including Gemini.
Following its bankruptcy filing, Genesis has liquidated assets worth IDR 25 trillion (1.6 billion US Dollars) after negotiations for an unsuccessful settlement with DCG and its longtime partner Gemini.
In November 2023, Genesis announced that DCG agreed to repay a loan of IDR 4.8 trillion (USD 324.5 million) in April 2024 to settle a lawsuit filed in September demanding a loan payment in arrears of IDR 9.5 trillion (USD 620 million).
Genesis proposes a plan that expects creditors who lend digital assets to recover up to 77%, a higher rate than if DCG wins in court. The proposal received broad support from creditors, including Gemini Earn program subscribers.
Judge Sean Lane has approved Genesis bankruptcy plans and a settlement related to New York Attorney General Letitia James, directing assets to former Earn customers rather than state authorities. Lane also approved a settlement with the US Securities and Exchange Commission (SEC), ending complaints over the Earn program that has now been discontinued. With this approval, Genesis hopes to provide clarity and resolution to its long-awaited creditors.
The English, Chinese, Japanese, Arabic, and French versions are automatically generated by the AI. So there may still be inaccuracies in translating, please always see Indonesian as our main language. (system supported by DigitalSiber.id)
