Genesis, the crypto lender that filed for Chapter 11 bankruptcy earlier this year, has filed a lawsuit against its parent company Digital Currency Group (DCG) and its affiliate DCG International Investments (DCIG).
According to a Wednesday court filing in the Southern District of New York Bankruptcy Court, Genesis said it loaned 18,697.7 BTC to DCIG in June 2022. The outstanding balance of the open loan agreement was later converted into a fixed-term loan due on May 11, 2023, but was only partially repaid with a balance of 4,550 BTC still outstanding.
In May, DCIG reportedly sought to convert the debt back into an open loan, but Genesis objected, and now seeks full repayment with interest and fees. The amount outstanding is worth around $116 million, the complaint said.
In the complaint filed against DCG, Genesis said it made four loans worth $500 million to its parent company in 2022. DCG also attempted to convert these loans into open loans, which Genesis did not agree to, even during the months-long mediation between the parties. Genesis now seeks the immediate repayment of the principal amount without late fees.
they DEMAND $500m dollars. Immediately. BUCKO
barry better get started on his sales.
FTX starts next week
US gov has 30k btc out of initial 50k left, to sell before end of year. pic.twitter.com/8z7SOLWFYF
— Napgetter 💤 (@napgener) September 6, 2023
The lawsuits come after Genesis said it had reached an in-principle deal with its creditors, backed by DCG, which would see creditors recover between 65% to 90% of the value of their claims.
However, major creditors groups, including crypto exchange Gemini objected to the proposed plan, with some arguing that the agreement was a “dead end” and dubbing the estimated recoveries as “fiction.”