The reason behind DCG’s objection is the staggering amount of compensation payments being proposed, which exceeds the legitimate claims of the affected parties. DCG firmly believes that Genesis should only be obligated to repay its customers and creditors an amount equivalent to the total value of the cryptocurrency assets recorded as of January 2023, the time when Genesis initially filed for bankruptcy.
DCG’s legal team contends that Genesis’s intention to provide “additional compensation” based on the appreciating value of the frozen crypto assets goes against the established laws governing bankruptcy proceedings in the United States.
Prior to DCG’s announcement, the management of Genesis made headlines by settling a civil lawsuit brought against them by the US Securities and Exchange Commission (SEC) and agreeing to pay a hefty $21 million fine as part of the settlement.