DCG to pay $620 million to settle Genesis lawsuit

Digital Currency Group (DCG) has reached a new debt-repayment agreement of $620 million with its bankrupt subsidiary Genesis Global Holdco LCC to settle the lawsuit. Bloomberg reports.

Genesis lawyer Sean O’Neill said that under the deal the crypto lender would receive about $200 million in the coming weeks and would require DCG to complete the outstanding payments by April 2024.

If the defendant defaults, Genesis may seek to recover any outstanding amount, according to the filings.

The deal will avoid costly, protracted litigation, O’Neill said. However, he noted that the agreement does not foreclose other disputes with DCG related to the bankruptcy settlement plan.

On November 16, 2022 Genesis froze withdrawals and the issuance of new loans. The firm cited “increased requests” from clients after the collapse of FTX and the hedge fund Three Arrows Capital.

In January 2023, the company and its subsidiaries Genesis Asia Pacific and Genesis Global Capital filed for bankruptcy. According to media reports, their obligations exceed $3 billion. Included in this sum are claims by Gemini exchange clients for $900 million.

In August DCG pledged to compensate Genesis creditors from 70% to 90% of funds. However the latter called the offer “unsatisfactory” and threatened to block any final bankruptcy deal with such terms.

In September Genesis filed a lawsuit against DCG over unpaid loans of $600 million.