In a bid to resolve a lengthy legal battle, bankrupt crypto lender Genesis and its parent company, Digital Currency Group (DCG), have brokered a pivotal deal potentially putting an end to a lawsuit seeking $620 million in repayments from DCG.
Outlined in a recent filing to a New York Bankruptcy Court on Nov. 28, Genesis detailed the agreement, whereby DCG committed to settling its outstanding $324.5 million in loans by April of the upcoming year. Moreover, Genesis retains the right to pursue any remaining unpaid sums.
This proposed agreement intends to bring closure to Genesis’ lawsuit initiated against DCG in September, specifically targeting the repayment of overdue loans totaling approximately $620 million.
While DCG has made partial payments subsequent to the lawsuit, this arrangement aims to draw a line under the contentious issue.
Genesis highlighted the immediate and significant benefits of the repayment pact, emphasizing its ability to sidestep potential risks, expenses, and resource diversions entailed by prolonged litigation. The agreement also stands as a crucial component of Genesis’ broader strategy to reimburse creditors, subject to their approval via a voting process before reaching the bankruptcy judge Sean Lean for final consideration.
However, recent legal tangles continue to complicate matters. Genesis initiated a suit against crypto exchange Gemini on Nov. 22, seeking the recovery of nearly $670 million in transactions. Additionally, both Genesis and Gemini are embroiled in a legal battle with the Securities and Exchange Commission, facing allegations of selling unregistered securities.
The state of New York also filed a lawsuit against the duo and DCG, accusing them of defrauding investors.
It is worth noting that Genesis initially filed for bankruptcy in January, a move that followed the suspension of withdrawals in November 2022, marking a turbulent period for the crypto lending platform.