Genesis Global Capital has filed lawsuits against both Digital Currency Group (DCG) and its international branch, Digital Currency Group International (DCGI). At the heart of the dispute is an unpaid sum of over $600 million spread across several loans. Genesis alleges that DCG owes them $500 million, stemming from four separate loans taken out in 2022. On the other hand, DCGI is said to be indebted to Genesis for 18,697.7 BTC, a debt dating back to a 2019 loan. Both loans had due dates set for May 9th and May 10th, 2023.
Context of the Dispute: Agreements and Bankruptcy
Genesis and DCG formalized their loan terms last November, sealing them with master loan agreements. The international counterpart, DCGI, did the same but in June 2019. To complicate matters further, both Genesis and DCGI operate under the umbrella of DCG. Genesis, currently in bankruptcy since January, argues that DCG and DCGI hold assets that rightfully belong to the bankruptcy estate of Genesis Global Capital.
Controversy over Loan Conversion
According to court documents, all loans reached maturity last May. However, DCG seemed eager to convert these debts into “Open Loans.” Genesis claims that this decision was made without their consent, maintaining their position for full repayment. DCG’s communication, including a wire transfer instruction request on May 9th, did not adhere to the previously defined terms in their agreement. The late nature of this request, especially compared to the loan due dates, seems to have further complicated things.
Current State of the Debt and DCG’s Response
According to the latest filings, DCG’s debt amounts to $500 million, while DCGI owes approximately 4,550.5 BTC, valued at around $117 million. In addition to the principal, Genesis is seeking late fees and accrued interest. The company believes that these funds could serve as crucial assets in its ongoing bankruptcy proceedings. However, DCG appears hopeful about the possibility of reaching a resolution. Their spokesperson expressed optimism about an imminent forbearance agreement and the initiation of fund distribution, aiming for substantial recovery for Genesis creditors.
