Digital Currency Group (DCG) has successfully concluded the settlement of over $1 billion in debt, a significant portion of which, nearly $700 million, was owed to its bankrupt subsidiary, Genesis.
The announcement was made by DCG CEO Barry Silbert, who shared the news on the social media platform X.
The debt settlement process was initiated following a lawsuit filed by Genesis against DCG and its affiliate, DCG International Investments (DCIG), in September. Genesis aimed to recover approximately $627 million in loans that had matured in May 2023.
However, in late November, the parties reached an agreement on a repayment schedule, with the goal of fully settling the outstanding balance by April 2024.
In his post, Silbert stated that the company has successfully repaid the funds borrowed from Genesis.
Barry Silbert further emphasized DCG’s accomplishment in repaying over $1 billion in debt, despite the challenges confronting the industry. He expressed excitement about the next chapter for the industry, with DCG playing a leadership role in it.
DCG issued an official statement confirming that all current obligations have been fulfilled in accordance with the settlement agreement.
The issues faced by Genesis trace back to 2022 when Three Arrows Capital, a crypto hedge fund, encountered difficulties, leading to liquidity problems for Genesis. The subsequent downturn of FTX added to Genesis’s challenges, eventually culminating in the company filing for Chapter 11 bankruptcy protection in January 2023.
Genesis Reaches Settlement With DCG
In the preceding month, Genesis and DCG successfully reached a settlement, bringing an end to the prolonged lawsuit aimed at recovering $620 million in repayments from DCG.
According to the terms of the agreement, DCG committed to settling its outstanding $324.5 million in loans by April 2024. The settlement also grants Genesis the option to pursue any unpaid amounts.
This resolution was proposed after Genesis initiated a lawsuit against DCG in September. The legal action aimed to compel DCG to repay overdue loans amounting to approximately $620 million.
In October, Gemini initiated a lawsuit against DCG and its CEO Barry Silbert, alleging fraudulent actions against creditors.
The legal action followed a bankruptcy restructuring proposal presented by Cameron Winklevoss, the billionaire co-founder of the Gemini crypto platform, for digital asset lender Genesis. Winklevoss’s plan involved several components, including $1.5 billion in forbearance payments and new loans, a $275 million forbearance payment, a $355 million debt tranche due in two years, and an $835 million debt tranche due in five years.
