Digital Currency Group (DCG) is objecting to the settlement between the New York attorney general and Genesis – the failed crypto lender that was among DCG’s array of digital assets businesses.
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Fourth quarter EBITDA was $99 million versus a loss of $7 million a year earlier.
New York Expands Fraud Case Against Digital Currency Group to $3 Billion
New York Attorney General Letitia James has amplified its fraud case against Digital Currency Group (DCG), now saying the company is responsible for $3 billion in investor losses tied to the Gemini Earn product and to direct investments with Genesis, according to a new court filing.
DCG Can’t Sell or Reduce Ownership of Genesis Until Bankruptcy Proceedings Close, Judge Rules
Genesis requested a New York bankruptcy court to bar ownership changes to secure tax benefits on around $700 million worth of operating losses.
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The former owner of CoinDesk faced a slew of lawsuits and complications in 2023, but, by year-end, his Digital Currency Group (DCG) had put some issues behind it.
Genesis-DCG Propose to Settle Lawsuit: Bankruptcy Filing
The deal would see DCG repay $275 million it owes to Genesis by April.
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CoinDesk was owned by the Digital Currency Group, which acquired the media company in 2016 for $500,000. Its new owner is headed by former New York Stock Exchange president Tom Farley.
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Gemini sues Genesis over GBTC shares used as Earn collateral, now worth $1.6B
Genesis wants to use the shares’ initial value in claims and is not releasing additional collateral transferred by DCG, the suit claims.
Gemini Files Court Statement Accusing Digital Currency Group Of Fraudulent Actions
In a Friday 15 court filing, Gemini, the US-based crypto exchange platform, has accused Digital Currency Group (DCG) of engaging in “fraudulent activities” and attempting to evade responsibility for the harm caused to creditors.
The filing directly responds to a statement made by DCG regarding a proposed agreement between DCG, the debtors, and the Official Committee of Unsecured Creditors.
Gemini Seeks Justice For Creditors Affected By The Collapse Of Genesis
According to Gemini, DCG devised a $1.1 billion promissory note to conceal the significant financial losses caused by the collapse of Three Arrows Capital (3AC).
However, DCG allegedly kept the actual terms of the note “hidden,” leading to misleading representations to Gemini’s creditors. Furthermore, the company claims that DCG borrowed a substantial amount of Bitcoin (BTC) from the company instead of providing much-needed capital.
Gemini also highlights that DCG is now unwilling to repay the more than $630 million it borrowed from the company, which was due several months ago in May.
In response, as reported by NewsBTC, DCG has proposed a deal that would require Genesis creditors, including Gemini, to extend years of credit to DCG. However, Gemini intends to fight against this proposal, asserting that DCG should pay creditors a just and adequate amount.
Gemini argues that DCG has attempted to “wear down” creditors over the past ten months, hoping they would settle for a significant reduction in the amount owed.
According to the court filing, Gemini is determined not to succumb to these tactics and will continue to pursue a fair resolution.
Rejection Of DCG’s Proposed Recovery Rates
In the filing, Gemini criticizes DCG’s proposed recovery rates, claiming they are “misleading and deceptive.” The company argues that receiving fractional shares of interest and principal payments over seven years from a risky counterparty is not equivalent to receiving the actual cash and digital assets owned by Genesis.
Gemini demands that DCG significantly improve the terms of the loans it provides if it wishes to gain the support of the harmed individuals.
Overall, Gemini accuses DCG of being the architect of its subsidiary’s insolvency and “sacrificing” the exchange and its creditors to shield itself from liability.
The company founded by the Winklevoss twins asserts that DCG’s delay tactics have hindered progress in distributing funds to Gemini Lenders, despite Gemini’s offer of a $100 million premium for a swift resolution.
It is worth noting that the court filing by Gemini comes after months of negotiations with the crypto lender and DCG and the collapse of the Gemini Earn program, which resulted in lawsuits and severed ties between Digital Currency Group and the crypto exchange.
Featured image from iStock, chart from TradingView.com
Gemini legal team accuses DCG of ‘gaslighting’ Genesis creditors
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.”
Gemini Blasts DCG and Genesis Bankruptcy Plan, Calling It ‘Misleading at Best’
Genesis announces winding down of crypto trading services
In January, Genesis Global Capital announced it would eliminate its crypto spot trading services “voluntarily and for business reasons” without additional details.
Gemini Earn users could recover all funds in new DCG remuneration scheme
DCG suggests a new deal in Genesis bankruptcy, offering unsecured creditors 70%–90% baseline recovery; if approved, it would involve the renegotiation of a $630-million loan between Genesis and DCG.
Gemini Earn users could recover all funds in new DCG remuneration scheme
DCG suggests a new deal in Genesis bankruptcy, offering unsecured creditors 70%–90% baseline recovery; if approved, it would involve the renegotiation of a $630-million loan between Genesis and DCG.
Genesis sues parent company DCG, other affiliate for $600M in overdue loans
DCG borrowed $500,000 from its subsidiary last year, and DCG Investments borrowed over 18,000 BTC. Both have allegedly defaulted.
Genesis Global Capital Files for Over $600M in Unpaid DCG Loans: Court Docs
Genesis Global Capital, a subsidiary of Digital Currency Group, filed in court for DCG to repay outstanding loans in excess of $600 million on Wednesday.
US-based Genesis Global Trading will eliminate its crypto spot trading service
The company, an affiliate of Barry Silbert’s Digital Currency Group, has been providing crypto spot trading since 2013. Its closure is “for business reasons.”
Genesis lenders call DCG agreement ‘wholly insufficient’
The agreement in-principle reached by DCG and creditors also said that the Ad Hoc Group and Gemini did not support the deal.
Genesis Lender Group Opposes ‘Wholly Insufficient’ DCG Deal
Creditors with $2.4 billion in claims against the bankrupt crypto lender could scupper an agreement made after months of wrangling.