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Genesis Global, the digital assets lender that went bankrupt last year, received court approval to pay billions in cash and crypto to creditors. 
According to <a href="https://www.bloomberg.com/news/articles/2024-05-17/failed-crypto-lender-genesis-wins-approval-on-repayment-plan" target="_blank" rel="">Bloomberg</a>, on May 17, Southern District of New York Judge Sean Lane confirmed Genesis’ Chapter 11 repayment plan, including a structure for returning crypto assets to creditors. 
This decision paves the way for Genesis to return customer assets locked on the platform since it paused withdrawals in November 2022. 
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 Bankrupt crypto lender Genesis won court approval of its plan to distribute billions of dollars in digital assets and cash to creditors, defeating a legal challenge brought by its corporate parent Digital Currency Group <a href="https://t.co/ekkzmu8mqk" target="_blank" rel="">https://t.co/ekkzmu8mqk</a>— Bloomberg Crypto (@crypto) <a href="https://twitter.com/crypto/status/1791616628821508244?ref_src=twsrc%5Etfw" target="_blank" rel="">May 17, 2024</a>
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Judge Lane also rejected a legal <a href="https://crypto.news/dcg-files-objection-in-bankruptcy-court-calls-out-genesis-settlement-subversive/" target="_blank" rel="">challenge</a> from Genesis Global’s parent company, Digital Currency Group (DCG), stating that the company lacked the legal standing to dispute the Chapter 11 plan. 
As a Genesis equity holder, DCG will be the last to be repaid under Chapter 11 rules. 
Due to the substantial creditor claims, Lane ruled that DCG’s equity interest in Genesis is effectively worthless, highlighting a multibillion-dollar shortfall.&nbsp; 
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The parent company had argued that the plan unfairly benefited Genesis creditors at its expense. It suggested that creditor claims should be based on the crypto prices when Genesis filed for bankruptcy in January 2023. 
Bitcoin (<a href="https://crypto.news/price/bitcoin/" target="_blank" rel="">BTC</a>) was trading at around $24,000 at the time. Today, it’s over $66,000. 
However, the judge dismissed this objection, noting that Genesis must prioritize other creditors, including federal and state financial regulators, with $32 billion in claims before distributing any funds to DCG. 
Genesis is one of several crypto lending firms impacted by the severe crypto market downturn of 2022. The company halted withdrawals due to a liquidity crisis in mid-November 2022. It reportedly owes over $3.5 billion to its top 50 creditors, including its former business partner, Gemini. 
Since filing for <a href="https://crypto.news/genesis-global-files-for-bankruptcy/" target="_blank" rel="">bankruptcy</a>, Genesis has been trying to liquidate some of its assets worth $1.6 billion after failing to reach settlements with DCG and Gemini.&nbsp; 
In November 2023, the crypto lender announced that its parent company had agreed to <a href="https://crypto.news/dcg-completes-1-billion-payoff-of-all-short-term-loans/" target="_blank" rel="">repay</a> an outstanding loan of over $300 million by April. This proposed deal was aimed at resolving a <a href="https://crypto.news/genesis-suing-dcg-to-recover-620m-in-outstanding-loans/" target="_blank" rel="">lawsuit</a> filed by Genesis in September, seeking repayment of overdue loans worth about $620 million. 
While Judge Lane’s decision is a setback for DCG, Genesis creditors have given it broad support. The bankrupt crypto lender estimated that creditors who lent digital assets could recover up to 77% under its proposal, significantly more than if DCG had prevailed.&nbsp; 
 Read more: <a href="https://crypto.news/vc-roundup-humanity-protocol-hits-unicorn-status-arch-labs-others-secure-major-funding/" rel=""> VC roundup: Humanity Protocol hits unicorn status, Arch Labs, others secure major funding </a>

Genesis Global gets court approval to distribute billions to creditors, DCG challenge gets rejected

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