Bankrupt Crypto Lender Genesis Seeks Court Help to Reduce Settlement Payout to 3AC
Digital Currency Group’s (DCG) subsidiary Genesis Global is seeking approval from the US court to revise its settlement agreement with the bankrupt Three Arrows Capital Ltd (3AC).
According to a document filed on November 9 with the US bankruptcy court of the Southern District of New York, Genesis said in its summary statement that 3AC debtors should accept a general unsecured claim of $33 million out of the total amount it owed them.
This figure represents 3.3% of the $1 billion total loss incurred by the imploded crypto hedge fund following its demise in 2022.
Should the court grant its motion, Genesis stated that both parties must mutually release themselves from further liabilities or pledges arising from their brief two-year relationship.
Providing a ground for its reasons, the defunct blockchain-based asset lender argued that 3AC was one of its largest borrowers between 2020 and 2022.
The firm also stated that the $1 billion incurred debt against it was the largest asserted claim in the Chapter 11 cases linked with the collapse of the once popular FTX cryptocurrency exchange.
The document further explained that a go-ahead with the court would significantly smoothen the way for the final confirmation of Genesis’ Chapter 11 plan of reorganization, prompt distributions, eliminating risks, expenses, and uncertainty often involved in protracted legal cases.
However, the impact of this proposed settlement agreement extends beyond 3AC debtors.
According to Genesis, all debtors with claims to Avalanche’s AVAX and Near Protocol’s NEAR tokens will need to forfeit them in favor of settling 3AC’s debts.
This includes any claims or security interest gained when 3AC engaged with the crypto lender until its demise a couple of years later.
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