As per the latest development, Genesis Global Capital (GGC) filed two new lawsuits on September 6 against Digital Currency Group (DCG) and DCG International Investments (DCIG). GGC is mainly aiming for the repayment of overdue loans from these companies. The loans amount to around $600 million. Genesis and DCIG are both owned by the DCG.
they DEMAND $500m dollars. Immediately. BUCKO
barry better get started on his sales.
FTX starts next week
US gov has 30k btc out of initial 50k left, to sell before end of year. pic.twitter.com/8z7SOLWFYF
— Napgetter 💤 (@napgener) September 6, 2023
The complaint was lodged in the Southern District of New York Bankruptcy Court. According to the details of the filing, Genesis gave a loan of 18,697.7 Bitcoin (BTC) to DCGI in June 2022. The loan was given under an open loan agreement of 2019. Even though a percentage of the loan was repaid, a balance of 4,550.5 BTC was still remaining.
In November, the outstanding balance of the loan was converted into a fixed-term loan which was due on May 11, 2023. However, DCIG sent another request to Genesis on May 9 to convert the debt into an open loan. Genesis did not agree to this request and now demands the repayment of the loan with interest and a late fee fine. Both parties continue to negotiate, but DCIG has not yet repaid any balance.
Genesis and its Parent Company Fall Into a Legal Battle
In further detail, it was revealed that GGC made four loans to its parent company, DCG in 2022. They were worth a total of around $500 million. All of these loans matured on May 11 and May 13, 2023. DCG claimed that it converted these loans to open loans under a prior agreement, but GGC did not agree to this. GGC argued that the request to convert loans was sent 90 minutes before midnight of the Maturity Date and thus, it was not a timely request.
Moreover, Genesis is now asking for complete repayment of the loan without late fee charges. Talks are being held between the two companies to settle the dispute but there has been no major breakthrough. Genesis filed for Chapter 11 bankruptcy this January and has now alleged that DCG and DCGI are ‘wrongfully in possession of property’ that belongs to the GGC. The lawsuits might not come to judgement but they hold a critical value for GGC in its Chapter 11 bankruptcy procedure. Genesis also suspended its spot trading services as a part of the proceedings.