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DCG completes repayment of $700 million Genesis debt

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Digital Currency Group (DCG) has announced the successful settlement of approximately $700 million in short-term loans owed to now-defunct crypto lending platform Genesis.

The settlement is part of DCG’s broader effort to fulfill over $1 billion in debt to various creditors within just over a year. The repayment of these loans by the firm is particularly noteworthy given the challenging conditions faced by the crypto market over the past year.

Genesis bankruptcy

The troubles for Genesis began surfacing following the collapse of the FTX exchange, which had a domino effect on various entities in the crypto space. Genesis was notably impacted by this event and subsequently faced liquidity issues.

In November 2022, Genesis suspended withdrawals, signaling the onset of its financial difficulties. The suspension of withdrawals was a critical point, indicating the platform’s inability to meet its clients’ demands for funds, which is often a sign of more profound financial distress in financial institutions.

The situation escalated when Genesis filed for Chapter 11 bankruptcy protection in January 2023. The move was indicative of the severe financial strain the company was under.

When filing for bankruptcy, Genesis was reported to owe a substantial amount, over $3.5 billion, to its top 50 creditors. This list included prominent names in the crypto industry, such as Gemini and VanEck‘s New Finance Income Fund, highlighting the widespread impact of its financial troubles.

DCG, being a significant venture capital firm in the cryptocurrency sector and the parent company of Genesis, found itself entangled in the financial complexities of the situation.

In November 2023, DCG agreed to repay all outstanding loans to Genesis by April 2024 as part of a proposed deal to allow Genesis to end the lawsuit against DCG. The Go to Source to See Full Article
Author: Assad Jafri

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