Digital Currency Group has objected to the confirmation of the bankruptcy plan from defunct lender Genesis.
The parent company of the lender said in a filing that it objected to the plan because it overpays creditors.
“DCG would support a plan that pays creditors one hundred cents on the dollar, and the Estates currently have sufficient assets to do so,” DCG said.
According to court documents, the plan “pays unsecured creditors hundreds of millions of dollars more than the full amount of their petition date claims” and “disproportionately favors a small controlling group of creditors over others.”
Read more: Bankrupt lender Genesis settles with SEC
“It also strips DCG of other valuable economic and corporate governance rights further violating the Bankruptcy Code and demonstrating a lack of good faith,” the filing said.
The amended plan, DCG continued, allows creditors to recover the cash value of their digital assets as of the petition date. However, it then “allows those same creditors to receive additional payouts based on the current value of those digital assets.”
Genesis filed for bankruptcy in January 2023 in the wake of the FTX crash. Prices of various cryptocurrencies were rocked by the collapse of one of the largest crypto exchanges in the world and had been under pressure since earlier that summer when the TerraUSD stablecoin depegged.
The price of bitcoin, for example, hovered around $20,000 in January 2023. Bitcoin (BTC) now sits around $42,000 a year later.
In the ongoing FTX bankruptcy case, the court ruled that creditors should receive the sum their crypto was worth as of the petition date — November 2022 — and doesn’t account for the price rebound.
Former FTX customers previously pushed back on the reimbursement decision, but Judge John Dorsey, in a hearing last week, said that “the code is very clear.”
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Source: https://blockworks.co/news/dcg-opposes-genesis-bankruptcy-plan