Digital Currency Group (DCG) and its bankrupt crypto lending arm Genesis Global reached an in-principle agreement that would see Genesis’s creditors recovering up to 90% in USD equivalents.
In a court filing on August 29, DCG claimed the plan, if approved, could lead to unsecured creditors’ recovering 70% to 90% in USD equivalent. The recovery rate can be 65% to 90% in digital assets, depending on market movements, media reports said.
“The agreement in principle will be documented and submitted to the Bankruptcy Court for final approval in connection with confirmation of a chapter 11 plan. We look forward to executing on this important milestone and for Genesis to begin its distributions to creditors,” DCG said in a statement.
The filing notes Genesis’s liabilities as $630 million unsecured loans due in May 2023 and a $1.1 billion unsecured promissory note due in 2032.
DCG could go for new debt arrangements and partial repayment agreements to meet its current obligations to creditors. These debts include a $830 million second-lien facility with a seven-year maturity period and a $328.8 million first-lien facility that matures in two years. The court filing revealed that DCG plans to pay $275 million in four installments.
Genesis halted withdrawals after FTX’s implosion in November 2022 and filed for Chapter 11 bankruptcy in January this year. It owed over $3.5 billion to its top 50 creditors, which included Winklovoss-twins’ Gemini and VanEck’s New Finance Income Fund.
