Digital Currency Group (DCG) claims that a group of Genesis Capital creditors is demanding new terms after previously agreeing to a comprehensive settlement more than two months ago. This setback is expected to delay the resolution of the bankruptcy case, according to the crypto conglomerate led by Barry Silbert.
Genesis Seeks Mediation
Last year’s market turmoil affected several crypto companies, including Genesis’s rivals like Celsius Network and Vault. Sam Bankman-Fried’s FTX filing for bankruptcy was the last straw for Genesis as a series of redemption requests destabilized the lending arm, leading it to file for bankruptcy. Genesis stated in its bankruptcy filing that it owes $2.4 billion to its main creditors out of nearly $3.4 billion in liabilities, and its main creditors and parent firm had agreed to an initial restructuring plan
A DCG statement said, “More than two months after all parties agreed to a comprehensive settlement that was submitted by Genesis Capital to the bankruptcy court, a group of Genesis Capital’s creditors has reneged and raised all new demands. We do not know if the hundreds of thousands of individual creditors are aware of this development, but the latest maneuver will prolong the court process.”
The bankrupt crypto lender is now seeking a mediator to help the parties involved reach a resolution as the DCG deal has hit a roadblock. A recent court filing stated that the Debtors believe “the mediation should be scheduled immediately” since “DCG owes GGC approximately $630 million pursuant to certain fixed term loans due during the second week of May.”
The Agreement
According to CryptoPotato, Genesis and its parent firm DCG agreed to shut down the former’s loan book and sell its bankrupt entities. DCG will also refinance its existing 2023 term loans by issuing a new, junior secured term loan in two tranches to creditors in the aggregate total value of about $500 million.
