Digital Currency Group, the owner of bankrupt Genesis Capital, has butted heads with its creditors.
Some creditors of bankrupt Genesis Capital have withdrawn from an agreement to restructure the cryptocurrency lender, according to Digital Currency Group (DCG).
Genesis Sale Envisioned
DCG, which owns CoinDesk and Grayscale, had hoped to sell Genesis to pay off at least $3.4 billion owed to creditors. The company had reached an agreement just two months ago. It could have resulted in a sale of Genesis or the handing over of its equity to creditors. However, DCG said some creditors have now made additional demands.
“Our understanding is that a subset of creditors have decided to walk away from the prior agreement. We do not know if the hundreds of thousands of individual creditors are aware of this development, but the latest maneuver will prolong the court process,” read a statement posted to DCG’s official Twitter.
“We will weigh any new demands against the concessions we have previously made,” it said.
Genesis Folded Amid FTX Fallout
The creditor group represents companies and individuals with claims of around $2.4 billion against the crypto lender. They will now offer the proposed deal to other creditors, including Gemini Earn lending product customers.
The agreement involves selling the bankrupt Genesis entities and refinancing outstanding loans. Including equitizing a 10-year promissory note that DCG gave Genesis in exchange for failed hedge fund 3AC claims.
The lending arm of Genesis froze withdrawals in November 2022 after FTX’s collapse. Then, Genesis’ lending businesses filed for bankruptcy protection in December. The lender was one of the first large crypto-organizations to fall amid the FTX turmoil late last year.
DCG, or Digital Currency Group, is one of the industry’s largest conglomerates, owning over 200 crypto companies. Reports in January suggested the group was in financial crisis. In February, DCG conceded that the group had lost over $1.1 billion in 2022.
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