DCG files objection in bankruptcy court, calls out Genesis’ settlement subversive

Digital Currency Group (DCG) opposes the settlement between the New York Attorney General and Genesis.

DCG filed a new application following an agreement with the prosecutor and Genesis, a bankrupt crypto lender that was one of DCG’s companies. Company executives note that Genesis Global struck a deal with the attorney general’s office earlier this month to drop charges of defrauding investors. However, DCG claims this was not a proper settlement.

The document notes that Genesis cannot, under the guise of a settlement, take value from the lower classes and redistribute it to preferred creditors.

DCG also called the deal “a back-door attempt to circumvent U.S. bankruptcy law,” characterizing it as a “subversive arrangement, put together last-minute and in secret.”

A week earlier, the Bankruptcy Court granted Genesis Global Holdco’s request to sell 35 million GBTC owned by the landing platform, worth over $1.3 billion, to satisfy creditors’ claims.

Digital Currency Group tried to delay the proposed deal until the court decided whether to approve the debt repayment plan. If the latter is rejected, the holding will consider the sale of trusts premature, although they will not be against such a scenario.

In September 2023, Genesis filed a lawsuit against DCG, demanding the parent company repay loans totaling $620 million. Later, Digital Currency Group announced the satisfaction of obligations to creditors and payment of about $700 million in favor of the landing platform.