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Genesis Settles $1 Billion Claim with Three Arrows Capital for $33 Million

Genesis

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TL;DR

  • Genesis settles $1 billion claim by defunct hedge fund 3AC for $33 million.
  • Both parties mutually release each other from liability in the settlement agreement, with a court hearing set for November 30.
  • The resolution highlights the challenges and complexities in the crypto industry.

Genesis, the crypto lender that declared bankruptcy in January 2023, has reached an agreement to settle claims by the defunct crypto hedge fund Three Arrows Capital (3AC) for a sum of $33 million. The settlement relates to transfers made before Genesis filed for bankruptcy and marks a significant development in the ongoing legal battle between the two entities.

The background

The collapse of Three Arrows Capital in June 2022 sent shockwaves through the crypto industry and is often considered the harbinger of a prolonged crypto winter. 3AC filed claims against Genesis, alleging financial improprieties in transactions predating Genesis’s own bankruptcy filing. Both parties engaged in extensive negotiations, leading to the recent agreement.

According to court documents, Genesis has agreed to pay Three Arrows Capital $33 million to settle the claims. The document states, “The 3AC Debtor shall receive an allowed general unsecured claim against Genesis in the amount of $33,000,000 in full and complete satisfaction of the more than $1 billion dollars in claims asserted against each of the Genesis Debtors.” The settlement also includes mutual releases of liability between the two parties.

Genesis’s perspective

Genesis, in its filing, revealed that it had filed claims of $1.2 billion against Three Arrows Capital in July 2022. The lender described 3AC as one of its “largest borrowers” during the period spanning from 2020 to 2022, up until the hedge fund’s collapse. This sheds light on the complex financial dealings that preceded the legal dispute.

A hearing regarding the proposed settlement is scheduled for November 30, 2023, where a New York bankruptcy court will review and potentially approve the agreement. This milestone could bring some closure to the protracted legal battle between Genesis and Three Arrows Capital.

The implications

The settlement between Genesis and Three Arrows Capital carries significant implications for both parties and the broader crypto industry. For Genesis, resolving a $1 billion claim for $33 million could be seen as a prudent financial move in the face of bankruptcy. On the other hand, Three Arrows Capital’s acceptance of the settlement suggests a willingness to recover at least a portion of its losses without protracted litigation.

The crypto industry has been no stranger to legal challenges and regulatory scrutiny in recent years. As the industry continues to evolve, legal disputes like the one between Genesis and Three Arrows Capital underscore the importance of robust governance and transparency in crypto transactions.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Lacton Muriuki

Lacton is an experienced journalist specializing in blockchain-based technologies, including NFTs and cryptocurrency. He dabbles in daily crypto news rich with well-researched stats. He adds aesthetic appeal, adding a human face to technology.

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