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Digital Currency Group (DCG) has raised objections to the bankruptcy plan proposed by its subsidiary, Genesis Global Capital. It cited concerns that the crypto lender intends to overcompensate customers beyond their legal entitlement. However, the global market cap declined around 1% over the last day to stand at $1.64 trillion. <a href="https://news.todayq.com/bitcoin-reclaims-43000-after-powells-remarks-on-interest-rate/" target="_blank" rel="noopener noreferrer nofollow">Bitcoin price</a> dropped below the $43k price level. DSG seeks clarity 
According to reports, DCG argues that Genesis should limit payments to customers and creditors based on the value of crypto assets in January 2023 when Genesis filed for bankruptcy. Bitcoin was trading at around $23k price level at that time.
On the other hand, Genesis has put forth a plan that includes “additional payouts” to customers. This is a factor in the increased value of assets like Bitcoin and Ethereum. DCG contends that such a proposal violates US bankruptcy law. It asserts that the rising value of assets, notably Bitcoin, could enable Genesis to repay customers based on deflated January 2023 prices.
The ongoing dispute arises as Genesis proceeds with the liquidation of its assets. They were unable to reach settlements with DCG, its former partner Gemini, and regulatory authorities. Genesis recently reached a limited settlement with the US Securities and Exchange Commission (SEC). It agreed to pay $21 million if any assets remain after fully repaying customers.
The SEC had filed a lawsuit against Genesis just a week before the crypto lender sought bankruptcy protection in January 2023. The SEC’s allegations focused on the joint crypto lending program, Gemini Earn. This was managed by Genesis and cryptocurrency exchange Gemini Trust. The commission accused them of illegally selling securities to hundreds of thousands of investors. Gemini has a role to play 
Gemini, founded by the Winklevoss twins, has played a central role in the legal battle. Having previously sued DCG over the failure of their crypto lending partnership, Gemini now supports Genesis’s bankruptcy plan. It highlights that it offers a viable path to repay customers whose assets have been locked for over 16 months.
The valuation of crypto bankruptcy claims has become a contentious issue, recently addressed in the Chapter 11 case of FTX. The court ruled that FTX could use cryptocurrency prices from November 2022, rejecting customer objections and asserting compliance with U.S. bankruptcy law.
In a separate move, Genesis seeks court approval to offload approximately $1.3 billion worth of Grayscale’s Bitcoin ETF (GBTC) shares, with additional plans to sell shares in Grayscale’s Ethereum Trust (ETHE) and Ethereum Classic Trust (ETCG). The court is set to hear the motion on Thursday, Feb. 8, amid an evolving landscape for crypto-related bankruptcies.
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Crypto market to crash? DCG challenges Genesis’s bankruptcy plan

Todayq News

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