Bankrupt crypto lender, Genesis Global Capital (GGC), has initiated a lawsuit against its parent company, Digital Currency Group (DCG), for not repaying approximately $630 million in loans.
“GGC commenced this adversary proceeding pursuant to Rule 7001(1) of the Federal Rules of Bankruptcy Procedure to recover undisputed amounts of digital assets owed to GGC by DCGI in connection with a loan that matured on May 11, 2023,” the filing noted.
Genesis Files Lawsuit Over Unpaid Maturing Loans
According to a recent court filing, Genesis alleges that it has extended multiple loans to DCG, which remain unpaid.
In June 2022, the lending institution granted DCG an open-term loan, providing a principal amount of 18,697 Bitcoin (BTC). In November 2022, DCG had arranged a fixed-term loan for the remaining balance.
“On or about November 10, 2022, the remaining BTC outstanding under the DCGI Loan was converted to a fixed-term loan with a maturity date of May 11, 2023.”
Genesis is yet to receive repayment. even though the loan has already matured. “Accordingly, the principal amount under the DCGI Loan is matured and currently payable by DCGI to GGC.”
The late fees were specified at a rate of 5%, annualized, and computed on a daily basis.
Concerns Raised About Genesis Bankruptcy Plan
According to an August 30 court filing, crypto exchange Gemini disputed Genesis’ bankruptcy plan proposed by DCG.
Gemini argued that the plan is not clear and lacks adequate information for creditors to understand the dynamics.
The filing stated,
“The Debtors revealed an “agreement in principle” among the Debtors. The Committee, and DCG that is woefully light on specifics and remains subject to definitive documentation.”
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