DCG objects NY Attorney's settlement, Genesis failure 😡🚫

Digital Currency Group (DCG) Objects to Settlement Between NY Attorney and Failed Genesis

Crypto VC Digital Currency Group (DCG) has raised objections to the settlement between its subsidiary, Genesis, and the New York attorney general’s office. DCG argues that the settlement is a “subversive arrangement” that diverts funds to preferred creditors and circumvents U.S. bankruptcy law. Last week, Genesis announced plans to sell its assets worth around $1.6 billion, including shares in Grayscale’s Bitcoin Trust, Ethereum Trust, and Ethereum Classic Trust.

DCG’s Objections

DCG accuses Genesis of not following proper legal processes in the settlement.
The group argues that the settlement falsely diverts funds to preferred creditors in violation of absolute priority.
DCG claims that the settlement is a back-door attempt to circumvent U.S. bankruptcy law.
The parent company of Genesis characterizes the settlement as a “subversive arrangement.”

Support from Former NY Federal Attorney

Jason Brown, an ex-senior federal attorney in New York, supports DCG’s objections.
Brown believes that the settlement did not involve extensive discussions or merits-based assessments.
He asserts that parties involved in such cases should engage in detailed analyses of potential settlement values.

Genesis’s Bankruptcy Filing

Genesis filed for Chapter 11 bankruptcy in October and sought protection from its creditors.
The exchange plans to use $150 million of cash to fund the company during bankruptcy and repay creditors.

Hot Take: DCG Raises Concerns over Genesis Settlement

DCG’s objections to the settlement between Genesis and the New York attorney general’s office highlight concerns about legal processes, fund diversion, and circumvention of bankruptcy law. The involvement of a former NY federal attorney who supports DCG’s objections adds weight to the argument. This development could have significant implications for the outcome of the settlement and may shape future discussions on similar cases within the crypto industry.