Digital Currency Group (DCG) has taken a significant step forward in its mission to address the bankruptcy claims stemming from Genesis.
DCG’s plan centers around reclaiming a substantial portion of the assets that Genesis owes to its creditors. Under the proposed framework, potential recoveries are anticipated to range from 70% to 90% of the funds for individuals who extended loans without any collateral. The recovery percentages could even fall between 65% and 90%, depending on the type of digital assets involved.
Tough Times for Genesis
Genesis, a lending unit, halted withdrawals after FTX faced problems and subsequently filed for bankruptcy protection in early 2023.
The latest court filing reveals DCG’s efforts to reach an in-principle accord for addressing these claims. Meanwhile, the negotiation process signals DCG’s commitment to finding equitable solutions in the wake of Genesis’ bankruptcy filing. By securing an initial agreement with the creditors, DCG is fostering the possibility of stabilizing the situation and providing a pathway toward financial recovery.
As part of this arrangement, DCG acknowledges the urgency of fulfilling its financial responsibilities. To address approximately $630 million in unsecured loans due by May 2023 and a significant unsecured promissory note of $1.1 billion maturing in 2032, a creative partial repayment strategy has been outlined.
Read More: Crypto Crackdown: DCG Under Scrutiny As Ties With Genesis Questioned
Structured Repayment Approach: What’s Been Decided?
The proposed plan entails two key repayment phases. The first involves a payment of approximately $328.8 million, scheduled over a two-year period, demonstrating DCG’s commitment to honoring its obligations in a responsible manner. The second phase encompasses a more extended timeline, with an $830 million repayment planned over seven years.
On the road to financial stability!
Moreover, DCG has shown its dedication to financial stability and recovery by pledging an additional $275 million through a series of installments. These installments are designed to address the May 2023 maturities, which encompass a total of $630 million in unsecured loans. This effort not only aims to benefit creditors but also contributes to restoring confidence and stability within the broader financial landscape.
Also Read: Gemini Claims Genesis Parent DCG Defaulted on $630 Million Payment
Stakeholders and market observers are on the edge of their seats, eagerly awaiting updates that could have ramifications for both Genesis and the broader digital currency ecosystem.
