Genesis and DCG reach deal for overdue debt, creditors to vote
Amid ongoing allegations of fraud towards both crypto firms, Genesis and its parent Digital Currency Group (DCG) have reached a settlement deal over unpaid debts that went overdue in May — but the deal must still be approved by creditors.
In an update to Genesis’ bankruptcy plan filed on Tuesday, it noted that DCG has agreed to pay its subsidiary $295 million — partly in US dollars and bitcoin — in installments by April.
DCG owes Genesis Global Capital $620 million, between four loans worth $500 million and 4,550.5 bitcoin borrowed by its international arm (worth $171 million at press time). The “partial repayment agreement” brings DCG’s total returns to about $502 million. Genesis’ creditors must still agree to the deal.
Read more: Genesis settles with 3AC to pay 96.7% less than the $1B it claimed
Crypto exchange Gemini, a major Genesis creditor, has repeatedly shot down its restructuring plans. DCG is currently embroiled in a lengthy legal dispute with Gemini, which claims Barry Silbert and his firms committed fraud. It accused Silbert of covering up Genesis’ insolvency before it collapsed under the weight of Three Arrows Capital and FTX last year.
Genesis has also sued Gemini over withdrawals made before its bankruptcy that gave it an “unfair advantage” over other creditors, and has requested $700 million be returned.
The Securities and Exchange Commission (SEC) have sued both Gemini and Genesis for allegedly selling unregistered securities.
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