Digital Currency Group, also known by the acronym DGC, and crypto lender Genesis, specialized in services for institutional clients, have reached an agreement after the latter requested the refund of multiple loans totaling over 600 million dollars.
Following a series of legal disputes, the two companies that have previously worked closely together, lending each other large sums of money on several occasions, have reached a solution that is advantageous for both parties.
DGC has already paid out 227.3 million dollars so far, but will have to pay another 275 million dollars in 3 installments by April of next year.
Meanwhile, Genesis’ lawyers seem to not want to stop here and file a lawsuit against Gemini for “preferential transfers”.
All the recovered money will be used to compensate the creditors of the platform, who have been waiting since January of this year to get their funds back.
Let’s see all the details below.
Digital Currency Group (DGC) reaches agreement with institutional crypto investment company Genesis
The Genesis saga continues: this time the crypto lender can celebrate the arrival of new liquidity after reaching a strategic agreement with partner Digital Currency Group (DGC).
For those who are not familiar with this delicate story, Genesis filed for Chapter 11 bankruptcy in the Southern District of New York in January of this year with a deficit of 3.4 billion dollars.
In an attempt to settle heavy debts and restructure the company, the latter would have asked all its debtors, including DGC, to repay previously made loans.
In total, the amount owed by the Standford venture capital, which boasts prestigious associations in its portfolio with companies like Grayscale Investments, amounted until recently to about 620 million dollars.
As of today, after a first payment of $227.3 million has been made, Digital Currency Group and Genesis have finally reached an agreement to settle the remaining debts, thus avoiding long and exhausting legal proceedings. Agreement.
The agreement consists of an initial down payment of 35 million dollars and a deduction of 10 million dollars from the sale of the Coindesk information site (previously owned by DGC), which was just sold to Bullish, a cryptocurrency exchange managed by former New York Stock Exchange (NYSE) President Tom Farley.
In addition, another 275 million dollars will be paid in 3 installments, with the deadline scheduled for April, with payments in US dollars and Bitcoin.
By doing some calculations, we can easily realize that with these payments Digital Currency Group will not fully repay the debt, but at the same time it will help Genesis increase the liquidity it holds in anticipation of a restructuring of its operations.
All of this will be done with the intention of “evaluating the most effective path to preserve assets and move forward with the activity.”, as stated in a recent press release by the crypto lender.
In these bankruptcy contexts, time sometimes plays a very important role because it allows, on one hand, to avoid the payment of legal consultations and, on the other hand, it puts companies in a position to repay their debtors and move on to restarting their business. repay their debtors and move on to restarting their business.
Genesis creditors, who have been waiting for their funds since January, will likely receive a sum ranging from 70% to 90% of what they are entitled to, according to an internal source at Coindesk.
No details have been revealed about the timing of these compensations.
Genesis blames Gemini for “preferential transfers”
While Genesis and Digital Currency Group make peace and reach an agreement for the return of a huge sum of money, the lawyers of the bankrupt crypto lender embark on another legal crusade, this time against Gemini.
At the time of filing for Chapter 11, Genesis owed a total of 900 million dollars to the Winklevoss brothers’ exchange, which has now grown to 1.6 billion dollars due to the increase in the price of GBTC shares used as collateral by the company itself.
These funds were supposed to generate interest for Gemini users who had invested in the earn program, but due to the turbulence recorded at Three Arrows Capital (3AC), on which Genesis was financially exposed, things have become extremely complicated.
Now Genesis claims that Gemini itself has made preferential transfers of a “gross amount not less than approximately $689,302,000” causing them significant damages.
Tyler and Cameran Winklevoss’ exchange has therefore been sued by their former business partner, who has asked the judge to “correct this injustice” in a move that does not hide pity and solidarity.
In particular, Gemini would have made “unprecedented withdrawals” shortly before Genesis declared bankruptcy, contributing to scaring the crypto community and generating a “run on the banks“.
During a 90-day period known as the preference period, the Gemini would then request the repayment of previous loans granted to the crypto lender.
These incorrect transfers have now been considered as “avoidable” and based on “information and belief” that Genesis was “insolvent“
A few days ago Gemini clarified through a tweet that Genesis has “raised several unfounded and provocative counterclaims” and that they would continue to pursue legal action.
