DCG Successfully Repaid Genesis’ $1 Billion Loan

Author: Jozo Knez

January 8, 2024

Genesis kripto / Image by: foto Shutterstock

Digital Currency Group (DCG) announced the completion of the repayment of all short-term loans of its bankrupt subsidiary Genesis, according to an official announcement on January 6.

During the past year, DCG repaid over $1 billion in debt to various creditors. The venture capital giant directed nearly $700 million to Genesis, fulfilling all its current obligations.

DCG completed the repayment of $700 million

– I am happy to share with you that DCG has fully repaid the money borrowed from Genesis. We have now repaid over $1 billion in debt, including this $700 million, despite the challenges the industry is facing. I am excited about the next chapter of the industry and DCG’s leading role in it – said Barry Silbert, founder and CEO of DCG.

After halting withdrawals in November 2022, Genesis officially filed for bankruptcy in January 2023. The following September, Genesis initiated legal proceedings against its parent company to recover an outstanding loan amount exceeding $610 million, which was due in May 2023. Court documents revealed that DCG has total debt exceeding $1.7 billion to the lender and other creditors.

In a complaint filed the same month, Genesis also intended to recover 4,550 bitcoins, estimated at approximately $199 million. However, in November, Genesis and DCG reached a repayment agreement, with the parent company committing to pay $200 million.

Meanwhile, the outstanding loan amount must be settled with Genesis by April 2024, according to the terms outlined in the plan approved by the federal bankruptcy court.

DCG will retain its stake until the bankruptcy is resolved

DCG will maintain its current ownership structure until the conclusion of Genesis’ bankruptcy proceedings. The venture capital firm’s ownership stake in Genesis must remain above 80% until the lender’s Chapter 11 plan is approved or converted into a Chapter 7 proceeding.

This decision allows Genesis to retain its protection within DCG’s tax-consolidated group, preserving the potential value of the federal net operating loss. This tax relief enables Genesis to offset losses with future profits, potentially preserving benefits of $700 million.