Digital Currency Group (DCG), a prominent venture capital firm in the cryptocurrency space, has reached a tentative agreement with the creditors of its crypto lending subsidiary, Genesis.
A court document released on August 29 suggests that unsecured creditors could recover between 70% and 90% of their investments if the revised plan is accepted.
The recovery rate for in-kind payments could range from 65% to 90%, depending on the digital asset’s denomination, as per the filing. “DCG is delighted to have reached a provisional agreement with Genesis and the Unsecured Creditors Committee. This will set the groundwork for a comprehensive resolution of the claims in the Genesis Chapter 11 Cases and pave the way for significant recovery for creditors,” DCG stated in a communication to Cointelegraph.
The provisional agreement will be formalized and submitted to the bankruptcy court for final approval as part of the confirmation of a chapter 11 plan, the statement added. To settle its existing debts to creditors, which include $630 million in unsecured loans due in May 2023 and $1.1 billion under an unsecured promissory note due in 2032, DCG will also enter into new debt facilities and a partial repayment agreement.
These debts comprise a $328.8 million first-lien facility with a two-year maturity and an $830 million second-lien facility with a seven-year maturity. Additionally, DCG will make instalment payments of $275 million before the plan’s effective date, as outlined in the partial repayment agreement, the document specifies.
Genesis was one of several crypto lending firms impacted by the severe bear market in 2022, filing for bankruptcy in January 2023. The company owed over $3.5 billion to its top 50 creditors, including entities like Gemini and VanEck’s New Finance Income Fund.
As previously mentioned, Genesis halted withdrawals in mid-November 2022 due to unprecedented market chaos following the FTX crypto exchange’s collapse. The firm stated that this event prompted an “extraordinary” volume of withdrawals that surpassed its available liquidity.
Get $200 Free Bitcoins every hour! No Deposit No Credit Card required. Sign Up