According to court documents, bankrupt cryptocurrency lending firm Genesis has agreed to pay $33 million to settle a $1 billion claim brought by Three Arrows Capital (3AC). <br>

Crypto lender Genesis, which is facing bankruptcy, has requested court approval to reduce the claim of defunct hedge fund Three Arrows Capital (3AC) from over $1 billion to $33 million as part of its Chapter 11 reorganization efforts. Genesis will also forfeit its claims to an undisclosed amount of AVAX and NEAR tokens. The proposed settlement is aimed at avoiding prolonged litigation and facilitating a smoother and more efficient reorganization process. The settlement proposal is pending approval by Judge Sean Lane at the U.S. Bankruptcy Court for the Southern District of New York, with a hearing scheduled for November 30.

Cryptocurrency lender Genesis has requested court approval for a proposed settlement agreement with Three Arrows Capital (3AC), which had claimed $1 billion against Genesis debtors. Genesis has proposed that 3AC receive an allowed general unsecured claim against Genesis for $33 million, which accounts for 3.3% of the original claims. Genesis has also proposed relinquishing all claims and entitlements to Avalanche and Near Protocol tokens in favour of 3AC. The proposed settlement agreement requires approval from Judge Sean Lane and objections from creditors can be made until 24 November, with a hearing scheduled for 30 November.

The US government has stated that the latest bankruptcy plan submitted by encrypted lending company Genesis represents a significant change in plans. The company is now seeking to liquidate assets instead of restructuring.This change occurred after the New York Attorney General sued Genesis and its parent company Digital Currency Group (DCG), which could lead to delays in the liquidation process.

Genesis Global Capital submitted a revised Chapter 11 bankruptcy plan on October 25th to address pending claims and interests of creditors. The revised plan categorizes the claims of Genesis Global Holdco's creditors into 10 classes, with 4 classes divided by currency for unsecured claims denominated in cryptocurrency. Legal currency, Bitcoin, Ethereum, and other unsecured claims denominated in cryptocurrency will be impaired, giving them the right to vote on the plan. Subordinated claims, government penalty claims, and interests are considered to reject the plan and have no voting rights. The differential treatment of cryptocurrency asset claims recognizes the different interests of Genesis creditors. Under the proposed plan, the Genesis entities will be liquidated by a newly formed "Liquidating Debtor" and supervised by a Plan Administrator, a new Board of Directors, and a Liquidation Oversight Committee. The liquidating debtor will liquidate assets and distribute them to creditors according to agreed-upon principles. Independent accounts will be set up for the plan, including claims, professional fees, litigation, and step-down reserves. The intercompany claim between Genesis Global Capital and Genesis Asia Pacific will be resolved to balance the recovery of creditors.

On October 25th, Genesis Global stated that it may be forced to undergo bankruptcy liquidation that does not involve its claim against Digital Currency Group (DCG) due to a civil fraud lawsuit brought by New York State Attorney General Letitia James against it, its parent company DCG, and former partner Gemini Trust Co. Previously, these three cryptocurrency companies were accused of defrauding investors of more than $1 billion through their joint investment project, Gemini Earn. Genesis plans to propose a "non-settlement" bankruptcy plan, distribute existing cryptocurrency assets to customers, and establish a process to retain the right to sue DCG and other parties.

A direct creditor of Genesis and member of the Fair Deal Group wrote a letter to the bankruptcy judge on Friday, drawing attention to the lawsuit filed against Genesis by the New York Attorney General yesterday. The letter claims that the lawsuit details how Genesis intentionally deceived creditors under the instruction of its parent company DCG. Creditors have told DL News that the NYAG "has done all the hard work for us". It is reported that most Genesis creditors are against the proposed bankruptcy plan.

Bloomberg analyst James Seyffart made an interpretation on the issues of DCG, Genesis, Gemini lawsuits and their relevance in a tweet. He stated that the only true relationship that could affect GBTC (rather than other declarants) is that Genesis is the only authorized participant (AP) of GBTC until the end of 2022. However, this is not conclusive evidence as some people believe. Becoming an AP means agreeing to be a facilitator of fund share creation and redemption. In this case, someone gives Bitcoin to Genesis and they go through the process of receiving GBTC shares that are equivalent in value as a return. In this case, the relationship between the two is closer because they are/were sister companies of DCG. Most ETFs have multiple APs, and they are often large banks. Legal issues of companies like Goldman Sachs or Bank of America or other large financial institutions do not actually affect the operation of ETFs as APs. If this were indeed the case, Genesis is no longer GBTC's AP and they were removed in October 2022. Any new information or potential improper behavior could change my view, but currently there is no evidence to support this.

A court in New York ordered the encrypted loan and trading company Genesis to comply with subpoena requests within five days, after Genesis failed to respond to a legal request for information related to the 2022 UST stablecoin crash by the October 9th deadline. The UST's failure shook the cryptocurrency market, and the Securities and Exchange Commission (SEC) subsequently sued the company behind it, Terraform Labs, and its co-founder Do Kwon, accusing them of misleading investors.