Bankrupt Genesis Filed Lawsuit Against its Parent Company DCG
Genesis Global Capital (GGC), a bankrupt crypto lender, recently sued its parent company Digital Currency Group (DCG), and other affiliates for $600 Million loans. DCG borrowed $500,000 from its subsidiary in 2022 whereas DCG Investments borrowed more than 18,000 BTC. It must be noted that both these firms have allegedly defaulted.
On September 6, 2023, Genesis filed two suits seeking the repayment of overdue loans from affiliated companies. As noted in the reports, all the loans are worth more than $600 Million in total.
Genesis Complaints Against DCG
The complaint against DCGI highlights that Genesis loaned it 18,697.7 Bitcoin in June 2022. This whole event was done “under an open loan agreement reached back in 2019. The outstanding balance of the loan was converted in November to a fixed-term loan due on May 11, 2023.” The loan was partially repaid, while a balance of 4,550.5 Bitcoins remained.
Moreover, DCIG sent GGC a request on May 9, 2023, to convert the debt back into an open loan. That GGC did not agree, but the balance was not paid. Now the crypto lender is demanding the repayment of the loan with interest along with late fees.
The complaint further noted that the parties underwent mediation over the last month but continue to negotiate. Genesis made 4 loans to DCG in the previous year that amounted to a total of $500 Million. These 4 loans matured on May 11 and May 13, 2023.
DCG kept the point on May 9, 2023, that “it was able to convert those loans to open loans as well under a prior agreement, but GGC did not agree.”
The crypto lender is looking for the repayment of the principal without late fees. These loans, too, had been “under mediation and are subject to continuing talks.” However, the suits may not come to judgment.
The Officials Statement
According to a media outlet, a DCG spokesperson said in a statement, “Genesis has agreed to stay the turnover action so that we can move forward with documenting the deal in principle that was reached with Genesis, the UCC, and DCG. We are documenting a forbearance agreement and expect to file it with the court shortly. At that point, we will initiate the distribution of funds and continue on the path to significant recovery for Genesis creditors.”
Earlier this year, the crypto lender declared bankruptcy and suspended withdrawals and new loan activity in November last year. GGC also laid off staff in the run-up to its bankruptcy filing. The crypto lender owes $3.5 Billion to its top 50 creditors.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
