See More

Digital Currency Group (DCG) Agrees to Pay $1.1 Billion to Genesis Creditors

2 mins
Updated by Kyle Baird
Join our Trading Community on Telegram

In Brief

  • Digital Currency Group strikes an agreement with Genesis creditors involving Genesis' bankruptcy filing.
  • The repayment plan aims to recover 70%-90% in USD and 65%-90% in-kind, depending on digital asset denomination.
  • The deal aims to settle DCG's existing liabilities of $630M and $1.1B under an unsecured promissory note due in 2032.
  • promo

In a pivotal moment that could recalibrate the financial future of the crypto sector, Digital Currency Group (DCG) has inked an in-principle deal with Genesis creditors.

According to court documents filed last Tuesday, this groundbreaking agreement answers many of the complex legal questions surrounding Genesis’ insolvency.

Digital Currency Group and Genesis Reach Agreement

DCG’s plan outlines a broad repayment spectrum. Unsecured creditors stand to recover between 70% and 90% of their claims in USD equivalent. In-kind recoveries could range from 65% to 90%, depending on the asset denomination.

However, it’s critical to note that these estimates are contingent on market conditions and the final terms of the agreement.

Genesis found itself in financial turmoil when it ceased withdrawals last November following the collapse of FTX. Opting for bankruptcy protection early this year, the company’s tribulations set off alarms across the digital asset industry.

DCG, in its correspondence to shareholders last month, hinted at being on the brink of settling the convoluted claims. The urgency was fueled by DCG’s impending liabilities.

It had roughly $630 million in unsecured loans maturing in May 2023 and an outstanding $1.1 billion under an unsecured promissory note due in 2032.

The Repayment Plan

The repayment structure agreed upon seeks to meet these obligations efficiently. The plan splits the $1.1 billion into two tranches. It will comprise a $328.8 million payment with a two-year maturity and an $830 million portion with a seven-year maturity.

Furthermore, DCG will dispatch four additional installments totaling $275 million to settle the looming May 2023 maturities.

Genesis Global Holdco and its subsidiaries entered the bankruptcy fray by filing in the US Bankruptcy Court for the Southern District of New York earlier this year. Official documentation disclosed that Genesis owed a staggering $3.5 billion to its top 50 creditors.

Digital Currency Group Portfolio. Source: DCG
Digital Currency Group Portfolio. Source: DCG

This included entities like crypto exchange Gemini, trading behemoth Cumberland, and financial innovators Mirana, MoonAlpha Finance, and VanEck’s New Finance Income Fund.

This accord represents not just a lifeline for DCG and Genesis but potentially a stabilizing factor for a volatile crypto market that has been rife with uncertainties.

This case is interesting, and the outcome could set new precedents for digital asset regulation and recovery.

Top crypto projects in the US | July 2024
Harambe AI Harambe AI Explore
Uphold Uphold Explore
Exodus Exodus Explore
Coinbase Coinbase Explore
Chain GPT Chain GPT Explore
Top crypto projects in the US | July 2024
Harambe AI Harambe AI Explore
Uphold Uphold Explore
Exodus Exodus Explore
Coinbase Coinbase Explore
Chain GPT Chain GPT Explore
Top crypto projects in the US | July 2024
Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.

This article was initially compiled by an advanced AI, engineered to extract, analyze, and organize information from a broad array of sources. It operates devoid of personal beliefs, emotions, or biases, providing data-centric content. To ensure its relevance, accuracy, and adherence to BeInCrypto’s editorial standards, a human editor meticulously reviewed, edited, and approved the article for publication.

images-e1706008039676.jpeg
Advertorial
Advertorial is the universal author name for all the sponsored content provided by BeInCrypto partners. Therefore, these articles, created by third parties for promotional purposes, may not align with BeInCrypto views or opinion. Although we make efforts to verify the credibility of featured projects, these pieces are intended for advertising and should not be regarded as financial advice. Readers are encouraged to conduct independent research (DYOR) and exercise caution. Decisions based on...
READ FULL BIO
Sponsored
Sponsored