Genesis Global Launches $4 Billion Payout: Bitcoin and XRP Creditors Set to Recover

• Genesis Global, the crypto lender that collapsed last year, has completed restructuring and begun paying its creditors a total of $4 billion.
• BTC owners get 51% in recoveries, while creditors get 66%; other altcoins get back 88% as valued on an in-kind basis, except for Solana creditors, who only get back 30%.

Just over 18 months after filing for Chapter 11 bankruptcy protection in a New York court, crypto lender Genesis Global has completed its restructuring and begun paying its creditors.

The lender, owned by the Digital Currency Group (DCG), announced recently that, together with two associated companies, it would distribute approximately $4 billion in digital assets pursuant to its Chapter 11 bankruptcy plan. The company revealed that, on average, the creditors will receive 64% in recoveries on an in-kind, coin-by-coin basis.

BTC had the highest number of creditors, and according to the press release, this group will receive 51.28% recoveries as valued on an in-kind basis in the form of BTC. Ethereum will get a higher payout at 65.87%, while other altcoins will receive 87.65% on average. Solana will be the only exception, with SOL creditors set to receive just 29.58% in recoveries.

The only group of creditors who will receive 100% of their recoveries are those who deposited US dollars and USD-backed stablecoins.

“Creditors will be entitled to additional recoveries following the initial distribution, depending on the results of ongoing claims reconciliation, contractual rights against third parties, and litigation,” the company added.

Genesis further revealed that it was setting aside some money to pursue other legal claims, including those against its parent company, DCG. It stated:

As part of the Plan, creditors have established a $70 million litigation fund to pursue causes of action against various third parties, including Digital Currency Group, which is Genesis’ corporate parent. The $70 million litigation fund will consist of $26 million in BTC, $13 million in ETH, and $31 million in USD.

An End to the Genesis Saga

The payout signals an end to one of the top scandals in crypto last year. Genesis filed for bankruptcy in a Manhattan court in January, being one of the casualties of the collapse of the FTX exchange in November of the previous year.

In its filings, Genesis claimed that its liabilities ranged from $1.2 billion to $11 billion, with loans from the Winklevoss-owned Gemini at the top of the list. The Winklevoss twins alleged that DCG founder Barry Silbert was just seeking new ways to avoid paying investors what he owed them, and since then, the two entities have been engaged in fierce legal battles.

The payout also comes despite DCG and Silbert’s attempts to stop it. Silbert tried to lead the court to only sanction payments in USD equivalent values and pocket the difference. For instance, if you lost 1 BTC back in January last year, the dollar equivalent was $21,000. However, despite the overnight dip, it’s now valued at over $50,000. This means that you’d have made a $29,000 profit.

Silbert repeatedly attempted to argue in court that he should be allowed to pocket the difference with his cronies, the same cartel behind the dozens of crypto firms that collapsed in the FTX aftermath. But this isn’t a new tactic for Silbert; in fact, as this article details, he has pocketed billions through grueling bankruptcy proceedings, where investors always lose out.