DCG reaches agreement with Genesis creditors to deliver recoveries of up to 90%

Quick Take

  • Genesis’ Tuesday bankruptcy filing showed that its parent company Digital Currency Group has reached an in-principle deal with its creditors.

Digital Currency Group (DCG), the parent company of bankrupt trading firm Genesis Global Holdco, reached an in-principle deal with Genesis creditors to settle their claims, a Tuesday court filing showed.

Genesis, which filed for Chapter 11 bankruptcy protection in January, said in the filing that it currently holds liabilities including the payment of about $630 million in unsecured loans due in May 2023 and a $1.1 billion unsecured promissory note due in 2032.

In an in-principle deal, DCG plans to take up new debt facilities and a repayment agreement. These will include a $328.8 million first-lien facility with a 2-year maturity and a $830 million second-lien facility with a 7-year maturity. 

DCG also intends to pay $275 million in four installment payments, according to the filing.

The plan, if consummated, could result in estimated recoveries of about 70% to 90% for unsecured creditors in U.S. dollar equivalent and a 65% to 90% recovery on an in-kind basis depending on the denomination of the digital asset, the filing said.

Genesis hit by 3ac, FTX

In January, Genesis filed for Chapter 11 bankruptcy protection in New York federal bankruptcy court after it took a financial hit following the collapses of crypto hedge fund Three Arrows Capital and FTX last year.

Genesis owes around $3.6 billion to its top 50 creditors, including claims from Gemini, the crypto exchange founded by the Winklevoss twins.

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