Genesis, the bankrupt crypto lending company, along with its parent company DCG (Digital Currency Group), have agreed to a settlement deal with each other that could end the ongoing legal battle between the two firms. The agreement could result in DCG repaying $620 million to Genesis.
In a filing dated November 28 to the United States Bankruptcy Court for the Southern District of New York, Genesis revealed that Digital Currency Group (DCG) has agreed to settle its outstanding $324.5 million in loans by April 2024.
The proposed agreement is intended to bring the ongoing legal battle between the two firms that started when Genesis decided to sue DCG in September to recover approximately $620 million, which they believed were overdue loans.
While DCG has made some partial payments since the legal battle began, the repayment deal would see Genesis getting some significant and immediate benefits that would see them avoid losing potential risks and expenses associated with a prolonged litigation battle. However, this all depends on whether the repayment deal is approved in the first place.
Genesis wants to repay its creditors, and this settlement deal could play a crucial part in achieving this goal. The creditors are set to vote on the plan before it undergoes consideration by Judge Sean Lean. The outcome will be contingent on the votes from the creditors.
Genesis also initiated a lawsuit against crypto exchange Gemini on November 22, in which they are seeking to cover approximately $670 million in transfers. To make matters more interesting, Genesis and Gemini are dealing with a lawsuit filed by the United States Securities and Exchange Commission (SEC).
The lawsuit is based on the allegations regarding sales of unregistered securities by both companies. Furthermore, the state of New York has filed a lawsuit against Genesis, Gemini, and DCG, accusing the trio of defrauding investors.
Genesis had filed for bankruptcy in January, a move that followed the suspension of withdrawals in November 2022. It will be interesting to see how these firms navigate the ongoing legal challenges in front of them and whether they are able to find an amicable solution in their dealings with the regulatory authorities.
