The digital assets market woke up to the news linked to Genesis Global receiving court approval to return approximately $3 billion in cash and cryptocurrency to its customers. This was part of a bankruptcy liquidation plan. US Bankruptcy Judge Sean Lane made the decision to leave Digital Currency Group (DCG) without any recovery from the bankruptcy.
Genesis gains approval
According to reports, Judge Lane went on to approve Genesis’s Chapter 11 liquidation plan by overruling an objection from DCG. Its parent company made an argument that users and creditor payments should be based on the crypto valuations from January 2023. However, this was the time Genesis had filed for bankruptcy.
It highlighted that since then crypto prices have jumped by a huge percentage. Bitcoin (BTC), the biggest crypto asset has risen from $21,084 recorded in January 2023 to hit almost $74,000 in March 2024.
Bitcoin price is up by 51% on the year to date (YTD) basis beating all other major crypto. BTC price has jumped by more than 10% in the last 7 days helping to regain the bullish momentum. It is trading at an average price of $67,073, at the press time. Its cumulative market cap stands at $1.32 trillion.
The global crypto market is up by around 2% over the past day to stand at $2.42 trillion. Its 24 hour trading volume stood around $70 billion.
Will market react to it?
Analysts from Secure Digital Markets noted Bitcoin’s performance. They highlighted its recovery past $66,000 and a peak at $67,500. They remain optimistic and suggest that as long as BTC stays above its 50-day moving average, this upward momentum is likely to continue.
Lane rejected DCG’s argument, stating that even if customer claims were capped at the lower prices from January, Genesis would still need to settle numerous other creditor claims, including $32 billion from federal and state financial regulators, before addressing any equity recovery for DCG. Lane concluded, “There are nowhere near enough assets to provide any recovery to DCG in these cases.”
Genesis plans to repay customers in cryptocurrency where possible, but it acknowledges a shortfall in the total amount owed. Genesis attorney Sean O’Neal emphasized the company’s stance against DCG’s claim that customer repayments should be based on the January 2023 crypto values. “We don’t buy into the idea that claims are capped at the petition date value,” O’Neal stated.