Digital Currency Group and Genesis Reach Agreement in Principle
Digital Currency Group (DCG), a leading venture capital firm in the crypto industry, has come to a preliminary agreement with creditors of its lending subsidiary, Genesis. According to a court filing published on Aug. 29, the estimated United States dollar equivalent recoveries for unsecured creditors could reach 70%–90%, should the amended plan be approved.
The revised plan could result in 65%–90% recovery on an in-kind basis, depending on the denomination of the digital asset, the filing states. To meet its current liabilities to debtors — including $630 million in unsecured loans due in May 2023 and $1.1 billion under an unsecured promissory note due in 2032 — DCG would enter into new debt facilities and a partial repayment agreement. These debts include a $328.8 million first-lien facility with a two-year maturity and a $830 million second-lien facility with a seven-year maturity.
Crypto Web 3.0 Projects Affected by Bear Market of 2022
According to a filing, DCG would pay $275 million in installments prior to the plan’s effective date as part of a partial repayment agreement. Genesis, a crypto lending firm, was one of many affected by the bear market of 2022 and subsequently filed for bankruptcy in January 2023. The company had more than $3.5 billion owed to its top 50 creditors, including Gemini and VanEck’s New Finance Income Fund.
In mid-November 2022, Genesis suspended withdrawals, citing the collapse of the FTX crypto exchange as the cause of an “abnormal” amount of withdrawals that exceeded its liquidity. This event highlighted the importance of Crypto Web 3.0 projects, such as Genshin Web Event 3.0, as well as the potential of cryptocurrency and Web 3.0 coins.
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