Following the events of FTX last year, the bankrupt Genesis, has requested the New York bankruptcy court to prevent ownership changes to secure tax advantages on approximately $700 million worth of business losses.
Genesis’ Major Move
The bankrupt crypto giant Genesis seems to have won the battle to prevent its parent company Digital Currency Group (DCG) from selling or reducing its ownership in the company until the Chapter 11 proceedings are over.
According to a court decision that emerged on Monday, Genesis took a giant step to secure certain tax benefits by preventing any changes in ownership. This step will only be valid if Genesis remains as part of the tax consolidated group of which DCG is the main partner.
It was also revealed that if DCG’s stake in the lending institution falls below 80%, Genesis would lose the advantages over its approximately $700 million worth of “federal net operating loss carryforwards.”
The proposal, which refers to the court decision, indicated that this loss could be used to reduce Genesis’ current and future federal income tax obligations, stating that it could “increase the Debtors’ cash position to the benefit of all relevant parties and contribute to a successful restructuring through future tax savings.”
According to the proposal, Genesis’ carryforwards seem to be directly related to the failure of the crypto hedge fund Three Arrows Capital in 2022. After a tumultuous year for crypto and the collapse of several high-profile firms in succession, Genesis could no longer sustain and filed for bankruptcy in January.
Current Status of Bitcoin and Altcoins
With the market becoming active in the early hours, the price of Bitcoin had risen above the $43,000 level but was unable to hold in that region. As of the time of writing, it is trading at $42,637, showing investors that the price has hardly moved in the past 24 hours.
In the past few hours, following the news about Do Kwon, there was volatility in the prices of LUNC, LUNA, and USTC. The prices of Altcoins suddenly experienced a 10% increase, delighting investors. Looking at the Binance listings, DATA has risen by 100% to $0.06, while AUCTION is trading at $40 with a 54% increase. Lastly, SEI is at $0.3463 with a 46% increase.
