- DCG has proposed a repayment plan to settle its legal dispute with Genesis.
- The repayment plan could be implemented by next year.
- The plan awaits approval by the creditors and the bankruptcy court.
Crypto giant Digital Currency Group (DCG) has struck a deal with its bankrupt lending subsidiary Genesis Global to end a multimillion-dollar lawsuit.
On September 6, Genesis initiated legal proceedings against DCG to recover hundreds of millions of dollars borrowed under a five-part loan. The company further accused DCG of financial improprieties and wide-ranging breaches of contract.
DCG Proposes a Repayment Plan
According to a bankruptcy filing dated November 28, DCG has agreed to resolve part of the dispute by paying $275 million to Genesis by April 2024. The company intends to pay in three installments, partly in Bitcoin (BTC) and U.S. dollars.
Per the filing, in addition to pegging Grayscale Trust shares as security for the money it owes Genesis, the deal will also see DCG make a $35 million upfront payment and a $10 million holdback from the recent sale of cryptocurrency media platform CoinDesk.
While the proposed payment plan is short of what Genesis demanded in earlier court filings, DCG has already paid $227.3 million against the outstanding $620 million owed to Genesis, demonstrating the company’s willingness to resolve the legal dispute.
On its part, Genesis welcomed the proposed repayment plan, noting that it is a proactive step toward resolving its bankruptcy.
Genesis Welcomes DCG’s Repayment Proposal
While speaking in a Tuesday hearing at the United States Bankruptcy Court for the Southern District of New York, Genesis lawyer Sean O’Neal noted that the DCG’s repayment plan would provide Genesis with “immediate significant and near-term benefits.”
The lawyer further asserted that the deal would help Genesis avoid the risk, expense, and diversification of resources required in pursuing litigation. The deal awaits approval by creditors, after which the bankruptcy court will recognize it.
In the meantime, while this lawsuit might likely end sooner than expected, Genesis is still embroiled in other legal disputes. On November 21, Genesis sued Gemini to recover $689 million withdrawn in preferential transfers.
A month before this action, the New York Attorney General filed a sweeping lawsuit against Genesis, Gemini, and DCG, charging the three companies with defrauding investors of over $1 billion.
Read about the recent deal Genesis and DCG struck with creditors:
Genesis and DCG Reach In-Principle Deal with Creditors
Read how Genesis was accused of offering unregistered securities:
Gemini Users File a Class Action Arbitration Against Genesis Global Capital