Crypto lending firm Genesis Global has reportedly been given the green light by a U.S. Bankruptcy Judge to return approximately $3 billion in cash and cryptocurrency to its clients. This move leaves the firm’s owner, Digital Currency Group (DCG), with no recovery from the bankruptcy.

What Happened: On Friday, U.S. Bankruptcy Judge Sean Lane approved Genesis’ Chapter 11 liquidation plan, dismissing an objection raised by DCG. The objection was based on the argument that Genesis should only pay its customers and creditors based on the value of crypto assets in January 2023, when the firm filed for bankruptcy, Reuters reported. Since then, however, crypto prices have seen a surge.

However, Judge Lane overruled DCG’s objection, stating that Genesis would first have to pay off other creditors, including federal and state financial regulators with claims totaling $32 billion, before being able to pay its owner. Lane emphasized that there were insufficient assets to provide any recovery to DCG.

Why It Matters: Genesis is returning the funds to its customers in cryptocurrency where possible. However, the firm does not have enough cryptocurrency to settle its debts. In February, Genesis estimated that it would be able to pay its customers up to 77% of the value of their claims, depending on future price fluctuations.

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