Genesis Set to Return $3B Customer Assets in Finalized Bankruptcy Liquidation Plan

Bankruptcy claims began trading at 35% of account balance value when they were initially listed on claim trading marketplace Xclaim.

AccessTimeIconMay 20, 2024 at 5:47 a.m. UTC
Updated May 21, 2024 at 1:40 a.m. UTC
  • Genesis will return 77% of customer assets, worth $3 billion, in a court-approved liquidation plan
  • Bankruptcy claim trading platforms were initially pricing in 35% of claims would be repaid shortly after the insolvency was announced
  • Digital Currency Group (DCG) will not be among the entities receiving a payout

Genesis recently secured court approval to distribute $3 billion in cash and crypto to its creditors, according to a recent filing, representing approximately 77% of the value of customer claims – however Digital Currency Group (DCG) will not be included in the list of entities paid out.

Genesis Global Holdco LLC, the holding company of Genesis, and its subsidiaries filed for Chapter 11 bankruptcy protection in New York in January 2023 due to significant losses from the collapses of Three Arrows Capital and FTX, with over $3.5 billion owed to its top 50 creditors.

In the immediate aftermath of the filing, the market was skeptical that customers would be made whole and the bankruptcy proceedings would be completed in an expedient manner. Bankruptcy claim marketplace Xclaim initially listed Genesis claims at 35% of their value in January 2023.

As of today, Genesis claims for bitcoin or ether are trading between 97-110% for claims over $10 million, while claims under $1 million are trading for between 74-94%.


Claims for fiat currency or stablecoins in Genesis accounts are trading between 89-91% for accounts worth between $1-10 million, and between 73-88% for claims under $1 million.

DCG, the parent company of Genesis, will not be paid out in the proceedings.

"The record here clearly establishes that there is not sufficient value in the Debtors’ estates to provide DCG a recovery as equity holder after unsecured creditors are paid," Judge Sean Lane wrote in the filing. "Given the size of the creditor claims, DCG is out of the money as an equity holder by billions of dollars, even if the Court valued creditor claims using the method DCG proposes."

DCG had previously argued for customer claims to be capped at the value of cryptocurrencies as of January 2023, which they believed would allow for full repayment to customers and potentially a recovery for DCG.

In the filing, Judge Lane noted that DCG assumed $1.1 billion of Genesis's debt from the Three Arrows Capital collapse with a 10-year promissory note, but this illiquid obligation did not cover the losses, leading to scrutiny of DCG's financial practices.

DCG and Genesis also had credit lines between the two companies, and Genesis ended up suing DCG over claims that the company missed payments on the loans it took.

UPDATE (May 21, 01:30 UTC): This article has been updated to indicate that DCG had paid off the entire loan as of January 6.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.