In a bankruptcy liquidation, cryptocurrency lender Genesis Global was approved by a judge on Friday to restore almost $3 billion in cash and bitcoin to its clients; as a result, its owner, Digital Currency Group, will not be able to recoup from the bankruptcy.

Judge Sean Lane of the United States Bankruptcy Court accepted Genesis’ Chapter 11 liquidation plan and dismissed DCG’s objection, which said that Genesis should only pay its creditors and consumers the amount the cryptocurrency assets were worth in January 2023, the month it filed for bankruptcy.

Since Genesis declared bankruptcy, the value of cryptocurrencies has increased significantly, and DCG and Genesis couldn’t agree on who should profit from the increase in value. For instance, in January 2023, the value of Bitcoin was $21,084, as opposed to its current $67,000 price.

DCG’s argument was dismissed by Lane, who concluded that Genesis would still have to pay a number of other creditors before it could provide funds to its equity owner DCG. These creditors included federal and state financial authorities who had filed $32 billion worth of claims, even if consumer claims were capped at the reduced pricing.

“There are nowhere near enough assets to provide any recovery to DCG in these cases,” Lane stated.

Genesis is making payments to its clients in bitcoin whenever it can, but it does not yet have enough of it to cover its whole debt.

Attorney Sean O’Neal for Genesis stated on Friday that the business did not agree with DCG’s claim that clients may receive payments “in full” in January 2023 due to reduced bitcoin pricing.

“We don’t buy into the idea that claims are capped at the petition date value,” O’Neal said.

Genesis projected in February that, subject to future pricing changes, it may be able to reimburse its clients for up to 77% of the total amount of their claims.

By late Friday, DCG could not be immediately reached for comment.

(Adapted from EconomicTimes.com)