DCG repays all short-term loans to Genesis
DCG has now repaid a total of more than $1 billion in debts to creditors
Adobe Stock and Genesis modified by Blockworks
Digital Currency Group said Friday that it has paid off its short-term loans from its bankrupt subsidiary Genesis.
The disclosure means that DCG’s total debt payoff to creditors is more than $1 billion, including almost $700 million paid to Genesis alone, the company added.
Genesis in September sued its parent company in an effort to recoup an outstanding loan balance of more than $610 million that matured in May 2023. The September court filings show that DCG owed more than $1.7 billion to Genesis and other creditors.
Genesis, in a separate complaint filed in September, also sought to recover 4,550 BTC, worth about $199 million as of Friday.
The crypto lender came to an agreement with DCG in November, under which the parent company agreed to pay $200 million over the following “few weeks,” a lawyer for Genesis said.
The remaining loan balance is due to Genesis by April 1, the plan, which was signed off in federal bankruptcy court, stipulates.
The payment follows news that DCG won’t make any changes in its ownership until Genesis’ bankruptcy proceedings conclude. DCG’s stake in Genesis must stay above 80% until the lender’s Chapter 11 plan is approved or it is converted into a Chapter 7 proceeding.
The ruling allows Genesis to remain protected under DCG’s tax consolidated group, which could protect the potential value of the federal net operating loss carryforwards (NOLs), a tax benefit that would allow Genesis to deduct losses from future profits. Genesis stands to retain benefits on $700 million in NOLs.
“With this milestone behind us, we’re looking forward to the next chapter of DCG and the future growth of our industry,” DCG said in a statement Friday. “And as always, we will continue to honor our financial commitments.”
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