Digital Currency Group (DCG) CEO Barry Silbert says the venture capital firm has settled over $1 billion in debt, including the nearly $700 million owed to its bankrupt subsidiary Genesis. In September, Genesis filed a lawsuit to recover around $627 million in loans owed to it by DCG and its affiliate DCG International Investments (DCIG) […]
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Venture capital firm Digital Currency Group (DCG) and its bankrupt subsidiary Genesis Global have struck a new agreement to settle an ongoing legal battle. A new filing with the US Bankruptcy Court for the Southern District of New York says that in September, Genesis filed a lawsuit to recover approximately $627 million in loans owed […]
The post Digital Currency Group and Genesis Global Reach Bankruptcy Agreement: Court Docs appeared first on The Daily Hodl.
Digital Currency Group has over $320 million left to repay, according to Genesis, and the deal would see that remaining sum repaid by April next year.
Bankrupt crypto lender Genesis and its parent company, Digital Currency Group (DCG), has struck a deal that could end an ongoing lawsuit to claw back $620 million in repayments from DCG.
In a Nov. 28 filing to a New York Bankruptcy Court, Genesis said DCG agreed to pay its outstanding $324.5 million in loans by April next year, and Genesis can chase up on any unpaid amounts.
The proposed deal aims to allow Genesis to end a lawsuit filed against DCG in September that sought to have the firm repay overdue loans worth around $620 million. DCG has made some payments since the suit.
Genesis said the repayment deal will provide it with “immediate significant and near-term benefits” and avoid the “risk, expense, and diversion of resources that would be required by litigation.”
The deal will form part of Genesis’ plans to pay back creditors, who will vote on the plan before it is sent to bankruptcy judge Sean Lean for a decision — who will consider the creditor’s votes.
Related: Genesis seeks court’s approval to reduce Three Arrows Capital claim from $1B to $33M
Genesis also sued crypto exchange Gemini on Nov. 22, seeking to recover nearly $670 million in transfers.
Meanwhile, Genesis and Gemini are facing a lawsuit from the Securities and Exchange Commission, which claimed they sold unregistered securities. New York also sued the duo and DCG, alleging the trio defrauded investors.
Genesis filed for bankruptcy in January after suspending withdrawals in November 2022.
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Beleaguered crypto lender Genesis is suing cryptocurrency exchange Gemini to recover over half a billion dollars in preferential transfers. A preferential transfer is paid off by an insolvent firm to a creditor typically within 90 days before filing for bankruptcy. If certain conditions are met, the recipient may have to return the funds so that […]
The post Embattled Crypto Lender Genesis Files Lawsuit Against Gemini in an Effort To Recover Over $689,000,000 appeared first on The Daily Hodl.
Genesis claims Gemini made preferential transfers of about $689 million from Genesis and wants the court to “correct this unfairness.”
Bankrupt crypto lender Genesis Global Capital has filed a lawsuit against cryptocurrency exchange Gemini to recover $689 million in preferential transfers, according to a Nov. 21 court filing.
The lawsuit alleges that during the 90-day period before Genesis filed for bankruptcy in January, Gemini withdrew an “aggregate gross amount of no less than approximately $689,302,000” at the expense of other creditors and continues to benefit through retaining the property Genesis seeks to recover. Genesis’s council requested the court to use the remedies provided by the United States Bankruptcy Code to correct the “unfairness and return Defendants to the same position as Plaintiff’s other similarly-situated creditors.”
The two crypto giants have been embroiled in a public feud over the recovery of funds that escalated into lawsuits after the collapse of crypto exchange FTX in November 2022.
Apart from legal remedies, the CEOs of the two companies were also involved in public spats, accusing each other of noncooperation and threatening legal action.
Gemini filed an adversary proceeding against Genesis on Oct. 27 to use 62,086,586 shares of its Grayscale Bitcoin Trust. The shares were used as collateral to secure loans made by 232,000 Gemini users to Genesis through the Gemini Earn program. The collateral is currently worth roughly $1.6 billion.
Related: Court approves Genesis settlement of $175M to FTX, expunges billions in claims
Genesis filed for bankruptcy in January after suspending withdrawals in November 2022. The Genesis bankruptcy adversely affected the Gemini Earn program, leading the crypto exchange to sue Genesis parent company Digital Currency Group (DCG) and its CEO Barry Silbert for fraud in July.
In September, Genesis also sued DCG, seeking the repayment of multiple loans worth over $600 million.
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New York State Attorney General (AG) Letitia James is suing three large crypto firms for allegedly defrauding over 230,000 Americans. In a new press release, AG Letitia James says that she is taking legal action against the crypto exchange Gemini, the lending firm Genesis and the investment giant Digital Currency Group (DCG) over allegations that […]
The post Gemini, Genesis and DCG Lied to Investors and Tried to Hide $1,000,000,000 in Crypto Losses, Alleges New York AG appeared first on The Daily Hodl.
Digital asset exchange Gemini says venture capital firm Digital Currency Group (DCG) is engaging in deceptive practices to avoid fulfilling its full obligations to the creditors of its crypto lending unit Genesis. In July, Gemini filed a lawsuit against DCG after Genesis went bankrupt while owing $735 million worth of assets to users of Gemini […]
The post Crypto Exchange Gemini Says Investment Giant DCG Is Using Misleading Assertions in Bankruptcy Plan appeared first on The Daily Hodl.
Lawyers representing Gemini Trust filed a response in bankruptcy court to Digital Currency Group’s plan claiming to offer unsecured creditors a “70–90% recovery."
Lawyers representing Gemini Trust have pushed back against a plan proposed by Digital Currency Group (DCG) for creditors of Genesis Global.
In a Sept. 15 filing in the United States Bankruptcy Court for the Southern District of New York, the legal team accused DCG of gaslighting Genesis creditors through “contrived, misleading, and inaccurate assertions” in the recovery plan. The plan, filed in bankruptcy court on Sept. 13, claimed that unsecured creditors could have a “70–90% recovery with a meaningful portion of the recovery in digital currencies” while Gemini Earn users could expect an “approximately 95–110%” recovery for their claims.
According to the legal team, DCG was attempting to “bait the Gemini Lenders into accepting a deal” that would allow the company to pay less than it allegedly owed. Lawyers called on the firm to “significantly improve the terms of the loans” provided to Genesis and not use Genesis’ bankruptcy proceedings as cover for justifications in the recovery plan.
“To distract the Genesis creditors from the inconvenient facts of its facially inadequate and inequitable proposal, DCG touts proposed recovery rates that are a total mirage — misleading at best and deceptive at worst,” said the Sept. 15 filing. “Make no mistake: Gemini Lenders will not actually receive anything close in real value terms to the proposed recovery rates under the current ‘agreement in principle.’”
The legal battle involved entanglements with cryptocurrency exchange Gemini and DCG over the Gemini Earn program, financed in part by Genesis. Genesis halted withdrawals in November 2022 in the wake of FTX’s collapse, citing “unprecedented market turmoil” at the time, and filed for bankruptcy in January 2023.
Related: DCG reaches ‘agreement in principle’ with Genesis creditors, debtors
According to court filings by Gemini, Genesis owed more than $3.5 billion to its top 50 creditors at the time of its Chapter 11 filing. The crypto exchange filed a claim in May aimed at recovering more than $1.1 billion in assets for roughly 232,000 Earn users and filed a lawsuit against DCG and CEO Barry Silbert in June, alleging fraud.
“Barry was not only the architect and mastermind of the DCG and Genesis fraud against creditors, he was directly and personally involved in perpetrating it,” said Gemini co-founder Cameron Winklevoss in June.
The U.S. Securities and Exchange Commission filed a civil suit against Gemini and Genesis in January for allegedly selling unregistered securities through the Earn program. The two firms filed a motion to dismiss the case in May, but it was still ongoing at the time of publication.
Magazine: Deposit risk: What do crypto exchanges really do with your money?
In January, Genesis Global Capital announced it would eliminate its crypto spot trading services “voluntarily and for business reasons” without additional details.
Crypto lending firm Genesis, a subsidiary of Digital Currency Group (DCG), will stop offering spot and derivatives trading for crypto assets through its British Virgin Islands unit.
According to a Sept. 14 statement from a Genesis spokesperson, the firm will “voluntarily and for business reasons” wind down its digital asset trading services through all of its entities. Genesis had been offering trading services through its GGC International arm in the British Virgin Islands.
The move followed Genesis Global Trading — a firm also affiliated with DCG but not subject to the same bankruptcy proceedings as Genesis Global Capital — announcing in January it would eliminate its crypto spot trading services under similar circumstances — i.e. “voluntarily and for business reasons”. GGC International had still been offering spot and derivatives trading at the time.
Genesis Global Capital halted withdrawals in November 2022, citing “unprecedented market turmoil” at the time. Reports from January suggested the firm could have laid off as much as 30% of its staff before it filed for Chapter 11 bankruptcy protection in New York. The SEC charged both cryptocurrency exchange Gemini and Genesis for offering unregistered securities through Gemini's Earn program.
Related: Gemini Earn users could recover all funds in new DCG remuneration scheme
The bankruptcy, legal, and regulatory entanglements between the various DCG subsidiaries and crypto firms — DCG is also the parent company of Grayscale Investments — have made waves in the space in the last year. Genesis blamed its collapse on Three Arrows Capital and reported it had suffered losses following the failure of crypto exchange FTX.
In August, DCG announced it had reached an “agreement in principle” with Genesis allowing creditors to recover the majority of their funds. However, Genesis lenders later described the deal as “wholly insufficient” — the firm reportedly owes roughly $3.5 billion to its top 50 creditors.
Magazine: Get your money back: The weird world of crypto litigation
Crypto exchange Gemini is calling out the U.S. Securities and Exchange Commission (SEC) in its lawsuit over the platform’s Earn program. In a lengthy post, Gemini lawyer Jack Baughman says that the SEC’s lawsuit targeting the protocol’s Earn program, which allowed customers to loan their digital assets to crypto firm Genesis as a means of […]
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