Digital Currency Group (DCG) has opposed its collapsed subsidiary’s customer repayment plan, arguing some former customers would receive too much money.
Court documents filed Monday outline DCG’s opposition to the Genesis payment plan.
Genesis was a cryptocurrency lender. went bankrupt last year. It is one of many companies that operates. Cryptocurrency giant DCGThis allowed users to earn cash for their cryptocurrency holdings.
Since Genesis went bankrupt, customers have been waiting to get their cash back. DCG said creditors would be made whole.
But Monday’s filing states that the current plan “disproportionally favors a small group of creditors over other creditor groups” and that “DCG cannot support such a plan and the court should not approve it.”
What is the biggest problem? Some creditors stand to receive much more as the price of digital assets rises. Bitcoin (BTC) and Ethereum (ETH) It has been on the rise since Genesis went bankrupt in January.
“Put differently, the apportionment doctrine allows certain creditors asserting claims based on digital assets that have significantly increased in value since the petition date to recover more than the value of their claims in U.S. dollars as of the petition date.” Submission said.
Genesis’ problems began in November 2022. It has provided billions of dollars in loans to beleaguered cryptocurrency companies such as Three Arrows Capital and Alameda Research, which are facing imminent default due to the market contagion caused by TerraUSD’s collapse.
Following the collapse of large digital asset brand FTX, Genesis announced to customers that it would suspend withdrawals from lenders due to “unprecedented market turmoil.” The suspension turned out to be indefinite.
Securities and Exchange Commission hit Lenders filed the lawsuit in January 2023, alleging that the company raised billions of dollars worth of cryptocurrency from hundreds of thousands of investors through unregistered securities offerings.
It filed for bankruptcy the same month.
Edited by Ryan Ozawa.
