DCG will pay $1 billion in short-term loans and Genesis will receive $700 million.
In a significant move toward financial stability, Digital Currency Group (DCG) announced that it has completed repaying all of its short-term loans totaling over $1 billion.
Genesis received about $700 million of that.
As a major player supporting the emerging financial system, DCG plans to stay ahead of the curve, pledging its commitment to its financial obligations.
Last month, DCG founder Barry Silbert stepped down from Grayscale’s board. The move comes ahead of expectations for a spot Bitcoin ETF decision from the U.S. Securities and Exchange Commission (SEC). Silbert’s resignation, disclosed in a filing with the SEC, leaves Mark Shifke as the new chairman.
The changes, along with the board appointments, come ahead of legal challenges, including a $1 billion fraud lawsuit from New York Attorney General Letitia James.
On the legal side, the judge ruled that no ownership changes can be made within Genesis until DCG successfully exits bankruptcy. This decision protects Genesis from DCG’s tax consolidation group and provides certain benefits during bankruptcy.
The protections will remain in place until the effective date of the Chapter 11 plan or possible conversion to a Chapter 7 case, emphasizing the importance of DCG maintaining at least 80% equity to preserve potential value.
In October 2023, DCG reported a 23% increase in revenue to $188 million in the third quarter of the year, driven by the cryptocurrency market recovery. Significant repayments to bankrupt cryptocurrency lender Genesis were also mentioned. The market recovery at the time was partly due to expectations of US cryptocurrency regulators approving a Bitcoin spot ETF.
Although the company appears to have positive financial metrics, DCG’s subsidiary Genesis Global Trading has decided to suspend its cryptocurrency spot trading operations, citing undisclosed “business reasons.”
The move comes after Genesis Global Holdco filed for bankruptcy in January 2023, as its specialty service was providing cryptocurrency loans.
Despite the suspension, Genesis Global Trading ensures continuity of spot and derivatives trading services through GGC International, a trading company registered in the British Virgin Islands.