Digital Currency Group (DCG), a major venture capital firm in the cryptocurrency industry, has reached an agreement in principle with the creditors of its crypto lending subsidiary Genesis.
according to If the revised plan is approved, unsecured creditors are expected to recover 70%–90% in dollar equivalents, according to a court filing dated Aug. 29.
The document states that the revised plan could result in 65% to 90% physical recovery, depending on the denomination of the digital asset.
To repay existing liabilities to debtors – comprising a $630 million unsecured loan due in May 2023 and a $1.1 billion unsecured promissory note due in 2032 – DCG will also enter into new debt financing and partial repayment agreement. The debt includes a two-year first lien of $328.8 million and a seven-year second lien of $830 million.
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DCG will also make $275 million in installments prior to the plan’s effective date under a partial repayment agreement, the document states.
Genesis is one of many cryptocurrency lending companies affected by the massive bear market in 2022 and had to file for bankruptcy in January 2023. The company owes more than $3.5 billion to its top 50 creditors, which include corporate funds such as Gemini and VanEck’s New Finance Income.
As previously reported, Genesis suspended withdrawals in mid-November 2022, citing unprecedented market volatility caused by the collapse of the FTX cryptocurrency exchange. The company claimed that the incident triggered “unusual” withdrawal amounts that exceeded its liquidity.
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