Genesis, a cryptocurrency lending firm that declared bankruptcy, and its parent company, Digital Currency Group (DCG), have reached an agreement potentially resolving a lawsuit aimed at recovering $620 million in repayments from DCG.
According to a filing with the United States Bankruptcy Court for the Southern District of New York on Nov. 28, Genesis reported that DCG has consented to repay its outstanding loans of $324.5 million by April 2024. This agreement allows Genesis to pursue any unpaid amounts after this deadline.
This proposed settlement is part of Genesis’ efforts to conclude a lawsuit initiated against DCG in September, which demanded the repayment of approximately $620 million in overdue loans. DCG has made partial repayments since the lawsuit began. Genesis has described the repayment agreement as offering “immediate significant and near-term benefits,” highlighting that it would circumvent the “risk, expense, and diversion of resources” associated with ongoing litigation.
The arrangement is a component of Genesis’ broader strategy to repay its creditors. This plan will be put to a vote among the creditors before being presented to Judge Sean Lean for a final decision, with the judge taking into account the creditors’ votes.
In a separate legal action, Genesis sued the cryptocurrency exchange Gemini on Nov. 22, attempting to reclaim nearly $670 million in transfers.
Concurrently, Genesis and Gemini are embroiled in a lawsuit filed by the U.S. Securities and Exchange Commission, which accuses them of selling unregistered securities. Additionally, both companies, along with DCG, are facing a lawsuit from New York authorities, alleging that they defrauded investors.
Genesis filed for bankruptcy in January following a suspension of withdrawals in November 2022, a move that reflected the broader challenges faced in the cryptocurrency lending sector.
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