Genesis Global, a bankrupt crypto lending firm, has been allowed by a court to return approximately $3 billion in cash and cryptocurrency to its customers.

According to Reuters, this decision leaves its parent company, Digital Currency Group (DCG), with no financial recovery from bankruptcy.

Genesis to Return $3 Billion in Cash and Crypto to Customers

US Bankruptcy Judge Sean Lane approved Genesis' Chapter 11 liquidation plan despite opposition from DCG, which argued that payments to Genesis' customers and creditors should be based on the cryptocurrency prices valued in January 2023, when the crypto lending company filed for bankruptcy.

At that time, Bitcoin's value was $21,084, compared with its current price of around $67,000. In rejecting DCG's objection, Lane said that even if customer claims were calculated at the lower prices, Genesis would still need to settle with other creditors first, including federal and state regulators with claims totaling $32 billion, before any money could be given to its equity owner DCG.

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Response of Crypto Lending Firm Genesis 

The judge noted that there are not enough assets to provide DGC with any recovery in these cases. According to Reuters, Genesis will repay customers in cryptocurrency if possible. However, the company does not have enough crypto to cover everything it owes.

Genesis attorney Sean O'Neal has voiced disagreement with DCG's assertion that customers could be fully paid back based on the January 2023 cryptocurrency prices. 

O'Neal noted that Genesis does not support the idea that the claims should be limited to the earlier values. Last February, Genesis said it could pay up to 77% of the value of the customers' claims based on future price fluctuations. 

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