Genesis seeks court approval to reduce 3AC’s claim from $1B to $33M

Insolvent cryptocurrency lender Genesis has asked the court to approve the settlement agreement with the imploded crypto hedge fund Three Arrows Capital (3AC).

According to a court filing on November 9, Genesis argued that 3AC's debtor should accept a total unsecured claim against Genesis in the amount of $33 million. The money originally accounted for 3.3 percent of the $1 billion in claims against Genesis borrowers.

“The agreement provides that the 3AC borrower will receive in full satisfaction of more than $1 billion in claims against each of the Genesis borrowers and an aggregate unsecured claim against GGC in the amount of $33 million,” the document says.

According to Genesis, 3AC's $1 billion claim against Genesis is the largest claim related to the FTX exchange's bankruptcy in Chapter 11. Genesis emphasized that the 3AC borrower was one of Genesis' largest borrowers from 2020 to 2022, until the fall.

Additionally, Genesis intends to assign all claims and rights to Avalanche (AVAX) tokens and Protocol (NEAR) tokens to the 3AC Borrower. Insolvent firms must waive any remaining debt, the proposed agreement says:

“The Genesis Debtors and 3AC release each other from liability in more detail in the Settlement Agreement; and the Genesis Debtors expressly set forth and will not otherwise waive all claims against DCG.”

The creditor said the termination was necessary to provide a smoother path to Chapter 11 reorganization plans and to reduce the risks and costs of litigation.

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“Among other benefits to the Genesis Debtors' estates, the proposed settlement significantly streamlines the process for confirmation of the Genesis Debtors' Chapter 11 reorganization plan, expedites the process, and eliminates the risks, costs and uncertainties associated with protracted litigation.” between the parties,” the document says.

The proposed settlement has been filed in the United States Bankruptcy Court for the Southern District of New York and requires the approval of Judge Sean Lane. Creditors have until Nov. 24 to challenge the deal, with a hearing set for Nov. 30.

The news comes around the same year as the collapse of the FTX exchange a year ago, which dragged the cryptocurrency industry into a massive bear market. Genesis and 3AC are just a few of the many companies affected by the FTX collapse, with Genesis' derivatives trading locked out of FTX and losing access to $175 million due to exposure to the collapsed platform.

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