Digital Money Group, the parent company of bankrupt cryptocurrency lender Genesis, has reached an agreement to pay up to 90% of what Genesis customers owe with the help of new loans.
exist court filings tuesdayDCG’s lawyers wrote that the company had reached an agreement in principle with Genesis Global Holdco and the committee representing unsecured creditors (primarily customers) in bankruptcy proceedings to repay Genesis’ $630 million in unsecured loans and a maturing $1.1 billion in unsecured loans. Promissory note 2032, and certain other potential claims. The deal could see Genesis customers recover 70% to 90% of what they owe in dollars.
To repay Genesis’ debt, DCG said it will assume two new loans, a $328.8, two-year, first-lien loan and an $830 million, seven-year, second-lien loan. The loans are secured by collateral provided by DCG, which also intends to make US$275 million in installments. The plan still needs bankruptcy court approval to go ahead.
“We look forward to the achievement of this important milestone and the commencement of distributions from Genesis to creditors,” DCG wrote in a statement.
— Digital Currency Group (@DCGco) August 29, 2023
Genesis first halted withdrawals in November following the collapse of cryptocurrency exchange FTX. In January, reports emerged that the company owed more than $3 billion to creditors, including cryptocurrency exchanges Coinbase, Kraken and Blockchain.com.
The company filed for bankruptcy in late January, joining other cryptocurrency firms such as Celeste and Voyager Digital that have been hit hard by the drop in cryptocurrency prices.
Genesis’ parent company DCG, which also owns media company CoinDesk and investment management firm Grayscale, has also been in a long-running conflict with Tyler and Cameron Winklevoss’ cryptocurrency exchange Gemini. Gemini co-founder Cameron Winklevoss claimed in an open letter in January that DCG owes the company more than $1 billion, including money Genesis should have paid Gemini customers through its now-defunct Earn product.
DCG wins Tuesday after federal court rules SEC unreasonably rejected Grayscale’s offer to launch ads bitcoin ETFs.
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