The parent company of bankrupt crypto lender Genesis Global Capital, Digital Currency Group (DCG), has announced its opposition to the subsidiary's bankruptcy plan.
Reason: the total amount of compensation payments exceeds the level of legal claims of the injured parties. DCG argues that Genesis must pay its customers and creditors no more than the total value of crypto assets recorded as of January 2023. That's when Genesis filed for bankruptcy.
DCG lawyers believe that Genesis’s intention to pay its clients “additional compensation” based on rising prices for frozen crypto assets violates US bankruptcy law.
Ahead of DCG's announcement, management at bankrupt crypto lender Genesis announced it had settled a civil lawsuit filed by the US Securities and Exchange Commission (SEC) and agreed to pay a $21 million fine.