- DCG agreed to settle loan debt of $325 million by April next year
- New York is suing Genesis, Gemini, and DCG for $1B fraud
Bankrupt crypto lender Genesis and Digital Currency Group (DCG), its parent company, have reached an agreement that could potentially put an end to an ongoing legal battle for $620 million in repayments. Genesis claims DCG owes it this amount, Cointelegraph reported, citing a Nov. 28 filing to a New York Bankruptcy Court.
According to Genesis, DCG agreed to settle loan debt of $325 million by April next year. Genesis can then proceed to settle any other outstanding payments.
Immediate and significant benefits
Under the agreement, Genesis will end its lawsuit, which sought to have DCG repay overdue loans in the amount of $620 million. According to Genesis, the deal will help avoid the costs and risks associated with litigation and provide “immediate significant and near-term benefits.”
Genesis will then be able to repay its own creditors, who will vote on the plan before sending it to a bankruptcy court judge for approval. The judge will consider the outcome of the vote.
A slew of legal troubles
In October, New York Attorney General Letitia Jamesannounced a large-scale lawsuitagainst Genesis, Gemini crypto exchange, and DCG for defrauding almost a quarter of a million investors of more than $1 billion.
Genesis also filed a lawsuit against Gemini to recover $670 million in transfers. The SEC is suing Genesis and Gemini for selling unregistered securities.
Genesis expectedly filed for bankruptcy
In January, Genesis filed for bankruptcy. It suspended customer redemptions after FTX collapsed in November 2022. A bankruptcy filing had been expected for some time.
Among the victims of FTX’s grandiose fall were industry leaders like crypto lender BlockFi and publicly traded mining company Core Scientific Inc., one of the biggest in its segment in the United States. Both have filed for bankruptcy protection.
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