Genesis files lawsuit against parent company for unpaid loans totaling $620 million.

Genesis files lawsuit against parent company for unpaid loans totaling $620 million.

Genesis Global Capital Demands Repayment of Overdue Loans from DCG and DCIG

Genesis Global Capital (Genesis), a leading cryptocurrency lender, has taken legal action against its parent company, Digital Currency Group (DCG), and DCG International Investments (DCIG), seeking the repayment of overdue loans amounting to over $620 million.

The Complaint Against DCGI

In its complaint lodged in the Southern District of New York Bankruptcy Court, Genesis claims that it extended a loan of 18,697.7 Bitcoin to DCGI, a subsidiary of DCG, in June 2022. Initially, this loan was under an open loan agreement dating back to 2019 but was later converted into a fixed-term loan due in May 2023.

Despite partial repayment, an outstanding balance of 4,550.5 BTC remains. Genesis declined DCGI’s request to convert the debt into an open loan, and now seeks the repayment of the outstanding balance, along with interest and late fees. The current outstanding balance in the DCGI case is approximately $116,875,000.

The DCG Loans and Mediation

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Genesis provided DCG with four loans totaling $500 million in 2022, all maturing in May 2023. DCG asserted its right to convert these loans into open loans, but Genesis contested this. Mediation has taken place between the parties, with negotiations ongoing.

DCG’s Response and Proposed Agreement with Unsecured Creditors

DCG responded to the lawsuits, stating that a deal in principle had been reached with Genesis and other parties involved. They are currently documenting a forbearance agreement and anticipate filing it with the court soon. DCG also reached an agreement in principle with Genesis’s unsecured creditors, proposing to return 70-90% of the owed amount. However, unanimous support for this agreement has not been achieved.

Resolution with FTX and the Continuing Struggles

Separately, Genesis Global has reached a preliminary agreement with FTX to resolve a longstanding dispute between the two companies. In this agreement, both parties intend to settle their mutual claims. These lawsuits against DCG and DCIG represent another chapter in the complex financial struggles of Genesis Global as it strives to recover its debts and navigate bankruptcy.

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The legal battles faced by Genesis Global Capital highlight the challenges in the cryptocurrency lending industry. It serves as a reminder for crypto investors to carefully consider the risks involved in borrowing and lending within the crypto space. Transparency, clear agreements, and thorough due diligence are crucial to avoid such disputes and financial setbacks.

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Cyrus Dailey stands as a luminary gracefully weaving the roles of crypto analyst, tenacious researcher, and editorial artisan into a captivating narrative of insight. Amidst the intricate world of digital currencies, Cyrus’s perspectives resonate like finely tuned melodies, captivating curious minds from a myriad of perspectives. Her ability to decipher complex threads of crypto intricacies melds seamlessly with her editorial finesse, transforming intricacy into a harmonious composition of understanding.

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