Genesis Capital Sues Digital Currency Group for Unpaid Loans
Genesis Global Capital (GGC), a bankrupt crypto lender, has taken legal action against its parent company, Digital Currency Group (DCG), for failing to repay around $630 million in loans. The lawsuit, filed under Rule 7001(1) of the Federal Rules of Bankruptcy Procedure, aims to recover the digital assets owed to GGC by DCGI, which matured on May 11, 2023.
Genesis Files Lawsuit Due to Unpaid Matured Loans
A recent court filing reveals that Genesis Global Capital has accused DCG of not repaying multiple loans. In June 2022, GGC provided DCG with an open-term loan of 18,697 Bitcoins (BTC), followed by a fixed-term loan arranged by DCG in November 2022. Despite the completion of the loan’s term, Genesis has yet to receive repayment. The principal amount under the loan is now matured and due from DCG to GGC.
Concerns Raised About Genesis Bankruptcy Plan
Amidst the ongoing controversy surrounding Genesis’ debt settlement plan, crypto exchange Gemini has raised concerns about the lack of clarity and essential information provided to creditors. According to a court filing, the proposed plan lacks specifics and definitive documentation. The plan states that unsecured creditors may receive between 70% to 90% of their owed amount in USD, with the percentage varying for in-kind recoveries based on asset allocation.
Hot Take
The bankruptcy lawsuit between Genesis Global Capital and Digital Currency Group highlights the challenges and risks involved in the crypto lending industry. It serves as a reminder of the importance of conducting thorough due diligence when entering into loan agreements and the potential consequences of defaulting on loans in the volatile crypto market.
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