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The insolvent cryptocurrency lender, Genesis, has petitioned a U.S. bankruptcy court to approve a proposed settlement principle announced on Feb. 28. According to an update, if the court approves the settlement, Genesis Earn users will receive all of their digital assets back in kind. The bankruptcy court is scheduled to consider Genesis’ request to approve the agreed settlement on April 16.
Near-Term Reimbursement of 97% of Funds Anticipated
Crypto lender Genesis announced on March 19 that it has petitioned the bankruptcy court to approve the “settlement principle” previously announced on Feb. 28. If the court approves the settlement, Genesis Earn users will receive all of their digital assets back “in kind.”
According to the latest Gemini Earn update, approximately 97% of the funds will be disbursed “in the near term,” with the remainder disbursed as recoveries are received from Genesis’ parent company, Digital Currency Group (DCG). Genesis also indicated that by petitioning the bankruptcy court for approval of the settlement it had initiated the process of compensating affected users.
As reported by Bitcoin.com News in late November 2022, Genesis suspended both withdrawals and new loan originations. A spokesperson for DCG stated at the time that the decision to freeze withdrawals was in response to “extreme market dislocation and a loss of industry confidence caused by the FTX implosion.” In January 2023, the U.S. Securities and Exchange Commission (SEC) announced charges against both Genesis and crypto exchange Gemini.
Bitcoin for Bitcoin Reimbursement
For more than a year, Genesis, its parent company, and Gemini struggled to agree on a process to reimburse Earn users. However, recent progress among the parties culminated in the announcement of the so-called settlement principle.
Meanwhile, the latest update also revealed the criterion that will be used to reimburse Earn users.
“As a reminder, this settlement means, for example, that if you had lent one bitcoin in the Earn program (as of November 16, 2022 — the date Genesis suspended redemptions), you will receive one bitcoin back. And it means that you will receive any and all appreciation of your assets since you lent them into the Earn program,” Genesis said.
If the court approves the plan, Genesis will return digital assets valued at $2 billion at current prices. This figure is $900 million more than when withdrawals were halted. According to an update, the bankruptcy court is set to consider Genesis’ request to approve the agreed settlement on April 16.
Is Genesis’ reimbursement proposal fair to users? Share your thoughts in the comments section below.