Genesis and Digital Currency Group Reach Agreement to Settle $620M Lawsuit
Summary:
Bankrupt cryptocurrency lender Genesis and its parent company, Digital Currency Group (DCG), have agreed to a settlement to end an ongoing lawsuit seeking to recover $620 million from DCG. The agreement stipulates that DCG will pay off its outstanding $324.5 million loan by April next year. The deal, voted on by creditors, is part of Genesis's repayment strategy and will help it avoid litigation costs. Genesis is also suing cryptocurrency exchange Gemini to recover nearly $670 million and is facing a lawsuit, along with Gemini, by the Securities and Exchange Commission for selling unregistered securities.
Reeling from bankruptcy, cryptocurrency lender Genesis and its mother company, Digital Currency Group (DCG), have entered into a settlement that has the potential to stop an ongoing court case seeking to recoup $620 million in repayment from DCG. In an official document submitted to a New York-based bankruptcy court on November 28, Genesis stated that DCG had consented to clear its outstanding loan of $324.5 million by April of the coming year, with an agreement that Genesis could press for any unpaid amounts.
The suggested settlement is purposefully constructed to enable Genesis to cease a legal action initiated against DCG in September, attempting to force the repayment of overdue loans amounting to roughly $620 million. Since the lawsuit, DCG has made some payments.
The proposed repayment agreement, Genesis said, will offer it "instantaneous and noticeable short-term advantages," while eliminating the "risk, cost, and potential dissipation of resources that would be necessary if the case were to continue".
The arrangement will become an integral part of Genesis's strategy to repay its creditors. Before forwarding it to bankruptcy judge Sean Lean for a final judgment, the creditors will cast their votes on the plan.
Furthermore, Genesis instituted a lawsuit against cryptocurrency exchange Gemini on November 22, asserting a recovery claim of almost $670 million in transactions.
Simultaneously, both Genesis and Gemini are up against a legal action instigated by the Securities and Exchange Commission, alleging they marketed unregistered securities. In addition to Genesis and Gemini, the New York legal authorities have also served DCG with a lawsuit, accusing the three entities of investor fraud. Genesis declared bankruptcy in January following a suspension of withdrawals in November 2022.
Published At
11/29/2023 3:09:51 AM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.