Cryptocurrency lender Genesis Global Holdco today (16 April) obtained bankruptcy court approval of a settlement resolving multiple disputes with fellow crypto company Gemini Trust Company, with which Genesis partnered on a crypto investment program known as Gemini Earn.

Judge Sean Lane of the US Bankruptcy Court for the Southern District of New York approved the settlement during an uncontested hearing in Genesis’ Chapter 11 case. The agreement resolves adversary proceedings involving Genesis and Gemini—including a dispute over the ownership of more than USD 3bn worth of Grayscale Bitcoin Trust shares—as well as proofs of claim that Gemini filed on behalf of customers in the Gemini Earn crypto investment program.

Among the settlement’s provisions is a payment from Gemini valued at USD 50m that would flow to Genesis’ Gemini Earn creditors. Genesis has also agreed to make a distribution of USD and digital assets to Gemini, which in turn will pass it onto to Gemini Earn customers.

As described by lawyers for Genesis and Gemini during today’s hearing, the key outcome of the settlement will be the swift return to Gemini Earn customers of 97% of the amount they are owed, paid out on an in-kind basis that matches distributions with the types of crypto assets the customers put into the Earn program. The Earn customers are also in line to receive additional distributions—meant to bring their recovery up to 100% from the 97% initially distributed—through either a direct contribution by Genesis parent company Digital Currency Group (DCG), or through the proceeds of litigation that Genesis is pursuing against DCG.

The Gemini settlement approval comes as Judge Lane continues to craft his ruling on whether to confirm Genesis’ Chapter 11 plan, which was the subject of multiple days of witness testimony and legal arguments in February and March. The judge said during today’s hearing that he hopes to have the confirmation decision relatively soon, but also acknowledged that he is not yet “on the eve” of completing his work on the ruling.

Genesis presented closing arguments on 18 March on plan confirmation. The company resolved much of the opposition to the plan, but still faces objections from DCG and a crypto creditor ad hoc group (CCAHG).

The Genesis plan generally provides for general unsecured creditors—most of whom were customers of Genesis’ various crypto lending and borrowing and other programs—to receive a combination of cash, digital assets, certain avoidance action recoveries, and proceeds from the sale of assets of the wind-down company. The plan also includes the funding of a litigation reserve that allocates a fixed amount, about USD 70m, to allow for the pursuit of retained causes of action, including litigation against DCG.

Genesis filed for Chapter 11 in January 2023, less than a week after it was hit with the securities fraud lawsuit from the US Securities and Exchange Commission related to the Gemini Earn program.