Digital Currency Group reaches agreement with creditors Genesis

Creditors of insolvent crypto lender Genesis can breathe a sigh of relief, provided the announced settlement is implemented. Indeed, the latter is not always the case.

According to information from a court filing on Tuesday, Digital Currency Group (DCG), the parent company of insolvent cryptocurrency service Genesis Global Holdco, has reached a tentative agreement with Genesis' creditors to settle their claims. According to the published court filing, the estimated recoveries would represent 70 to 90 percent of unsecured creditors if the plan is properly implemented.

After Genesis filed for Chapter 11 bankruptcy in January, the company disclosed in its filing that it has several liabilities. These liabilities included unsecured loans of about US$630 million. These were due in May 2023. In addition, there are unsecured amounts of US$1.1 billion due in 2032. Whether victims will actually get any money back remains to be seen.

As part of the agreement, DCG plans to acquire new credit facilities and implement a repayment plan. These plans include a first US$328.8 million two-year deposit facility and a second US$830 million seven-year deposit facility.

In addition, DCG plans to prepay $275 million under the partial repayment arrangement.