Key Points:
- DCG in deal with Genesis to settle a lawsuit in which Genesis sought roughly $620 million from DCG.
- The agreement will provide Genesis with approximately $200 million in value over the next few weeks and requires DCG to complete outstanding payments in April 2024.
- The agreement will avoid months of costly litigation with DCG and guarantees the bankrupt crypto lender will be partially repaid what it’s owed.
Digital Currency Group DCG in deal with Genesis to settle a lawsuit in which Genesis sought roughly $620 million.
DCG In Deal With Genesis To Secures $200 Million Payment
The agreement, which was announced Tuesday in bankruptcy court, will provide Genesis with approximately $200 million in value over the next few weeks and requires DCG to complete outstanding payments in April 2024. The agreement is meant to resolve a lawsuit that Genesis filed in September to recover outstanding loans from its parent company. DCG, which has been making payments to Genesis since the lawsuit was filed, still owes its subsidiary $324.5 million as of November 28, according to court documents.
Genesis said the agreement will avoid months of costly litigation with its parent company and guarantees the bankrupt crypto lender will be partially repaid what it’s owed. However, the deal does not resolve other disputes with DCG related to Genesis’s plan for resolving its bankruptcy.
Genesis Grapples with Ongoing Litigation while Securing Partial Repayment
Genesis is also facing off in court against its former business partner Gemini Trust Co., and the two also face a suit brought against them from the US Securities and Exchange Commission (SEC). Meanwhile, the New York State Department of Financial Services (NYDFS) has brought legal action against Genesis and DCG.
The agreement announced Tuesday will become part of Genesis’s proposed payout plan for its creditors. That plan will be sent to creditors for a vote. US Bankruptcy Judge Sean Lane will take that vote into consideration when he makes a final decision on the proposal. Genesis filed for Chapter 11 bankruptcy protection in January, following several other large crypto firms into bankruptcy. The company has been struggling to recover from losses incurred in the recent cryptocurrency market downturn.
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