DCG said it fully paid off its Genesis loans, but its creditors beg to differ
DCG said on Friday it had completed its repayment of short-term loan obligations to Genesis, but a new court filing Monday claims otherwise
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Digital Currency Group has not fulfilled its repayment requirements to its bankrupt subsidiary Genesis Global, the ad hoc group of lenders alleged Monday.
DCG entities ”continue to owe the Debtors’ estates and their creditors significant sums of USD and BTC,” the group said in a Monday court filing.
Genesis and other debtors claim DCG still owes an undetermined amount of bitcoin as well as $26 million in interest and late fees — as stipulated by its repayment agreement and master loan agreements.
Read more: DCG repays all short-term loans to Genesis
DCG, the group says, transferred around $189 million in US dollars in addition to “the relinquishment of certain ETHE shares and illiquid ETCG shares…purportedly in satisfaction of the DCG entities’ BTC obligations.”
DCG’s shares of ETCG, the Grayscale Ethereum Classic Trust, and ETHE, the Grayscale Ethereum Trust, had been held as collateral for its loans from Genesis, the filing added. But according to its partial repayment agreement, drafted in September, DCG is only allowed to settle its USD and BTC requirements in those currencies, not other assets.
Genesis cannot determine how much of DCG’s bitcoin obligations remain outstanding until it sells the ETHE and ETCG and purchases bitcoin with the proceeds, costs for which would be passed on to DCG, the filing states.
Genesis in September sued its parent company in an effort to recoup an outstanding loan balance of more than $700 million (as of Monday) in cash and cryptocurrencies that matured in May 2023. The September court filings show that DCG owed more than $1.7 billion to Genesis and other creditors.
Genesis claimed that DCG had an outstanding balance of 4,550 BTC, worth about $214 million as of Monday, and 14,048 bitcoin cash, worth about $3.5 million as of Monday, plus an additional 70 bitcoin in late fees.
DCG did not immediately respond to Blockworks’ request for comment.
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