Genesis Global Seeks Approval to Trim Settlement with Bankrupt 3AC
Digital Currency Group’s (DCG) subsidiary, Genesis Global, is seeking approval from the US court to amend its settlement agreement with the bankrupt Three Arrows Capital Ltd (3AC).
In a filing on November 9 with the US bankruptcy court of the Southern District of New York, Genesis proposed that 3AC debtors accept a general unsecured claim of $33 million, representing 3.3% of the $1 billion total loss incurred by the defunct crypto hedge fund in 2022.
If approved, both parties would mutually release themselves from further liabilities stemming from their two-year relationship. Genesis argued that 3AC was one of its largest borrowers between 2020 and 2022 and that the $1 billion debt was the largest claim in the Chapter 11 cases associated with the collapse of the FTX cryptocurrency exchange.
The impact of the proposed settlement extends to all debtors with claims to Avalanche’s AVAX and Near Protocol’s NEAR tokens, requiring them to forfeit these claims to settle 3AC’s debts.
Genesis plans a pro-rata distribution of funds, with payment in cash or another method chosen by 3AC debtors. The motion also addressed the ongoing claims settlement with Gemini exchange, emphasizing that these claims are part of its Genesis Bankruptcy Proceeding. Creditors, including Gemini, have until November 24 to file objections, with the courts set to consider the motion by November 30.
Despite challenges in 2022, including the collapse of the FTX exchange, Genesis creditors BJ and Branden revealed they reinvested in the crypto lender after receiving assurances about risk mitigation, though the reality has not aligned with these promises, leaving investors awaiting the return of their funds.
