In a significant development, the embattled crypto lending firm Genesis and its parent company Digital Currency Group (DCG) have brokered a deal potentially closing the chapter on a contentious $620 million lawsuit.
Genesis revealed in a filing to the U.S. Bankruptcy Court for the Southern District of New York on November 28 that DCG has committed to clearing its outstanding $324.5 million loan by April 2024. This agreement, allowing Genesis to pursue any remaining dues, aims to quell a lawsuit initiated by Genesis against DCG in September over unpaid loans, according to news report by Cointelegraph
The proposed settlement not only seeks to halt protracted legal proceedings but also promises immediate benefits to Genesis, sparing the company from the financial burden and resource drain associated with ongoing litigation.
The repayment arrangement stands as a pivotal step in Genesis' plan to settle creditor debts. Once subjected to creditor voting, the proposal will proceed to Judge Sean Lean for final review, weighing the collective decisions of the creditors.
Separately, Genesis filed a lawsuit against crypto exchange Gemini on November 22, seeking restitution of approximately $670 million in transfers.
Adding complexity to their challenges, both Genesis and Gemini face legal actions by the U.S. Securities and Exchange Commission (SEC) for alleged involvement in selling unregistered securities. Furthermore, a lawsuit from New York authorities has accused Genesis, Gemini, and DCG of perpetrating investor fraud.