Digital Currency Group Faces Allegations of Unfulfilled Repayment to Genesis Global
An ad hoc group of lenders has accused Digital Currency Group (DCG) of failing to fulfill its repayment obligations to its bankrupt subsidiary, Genesis Global. Despite DCG’s recent announcement of full repayment, the lenders claim that significant sums are still owed in both USD and BTC. They allege that DCG transferred $189 million in US dollars and certain shares to settle its BTC obligations. However, Genesis states that it cannot determine the outstanding bitcoin obligations until it sells the shares and converts the proceeds into bitcoin, with costs borne by DCG.
Disagreement Over Form of Payment
The disagreement extends to the form of payment, as the creditors argue that the repayment agreement only allows settlement in USD or BTC. They express concern over DCG’s proposed use of illiquid instruments as collateral. The creditors emphasize that the agreement did not permit settlement in any form other than USD or Bitcoin.
Legal Challenges and Conflicting Claims
The official committee of unsecured creditors has revealed that DCG has a debt of BTC and Bitcoin Cash, along with late fees. This sets the stage for further legal scrutiny and resolution. DCG claims to owe more than $1.7 billion to Genesis and other creditors, including BTC and Bitcoin Cash, along with additional late fees. However, Genesis alleges that DCG owes them a significant sum of BTC.
Genesis Bankruptcy and Resolution
Genesis filed for bankruptcy in January 2023 after suspending withdrawals in November 2022. In November 2023, DCG reached an agreement to settle all outstanding loans with Genesis by April 2024. This was part of resolving a legal dispute arising from Genesis’ bankruptcy filing. The lawsuit sought to compel DCG to repay overdue loans worth approximately $620 million.
Hot Take: Controversy Surrounds DCG’s Debt Repayment
Digital Currency Group (DCG) is facing controversy as allegations arise regarding its repayment of debts to Genesis Global. Despite DCG’s announcement of full repayment, an ad hoc group of lenders claims that significant sums are still owed in USD and BTC. The disagreement centers around the form of payment, with creditors arguing that DCG cannot settle its obligations with assets other than USD and BTC. This legal challenge sets the stage for further scrutiny and resolution. The conflicting claims and ongoing legal dispute highlight the complexities and potential repercussions of debt repayment in the crypto industry.
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