Genesis Global Capital sued Digital Currency Group (DCG) and DCGI for nearly $600 million in loans. In 2022, DCG borrowed up to $500 million from Genesis across four loans, while in 2019, it borrowed 18,697.7 BTC.
On Nov. 10, 2022, DCG and Genesis signed master loan agreements with extended or normal maturity dates of May 9 or 10, 2023. Genesis and DCGI signed a master loan agreement on June 21, 2019, with a 2023 maturity date. Genesis and DCGI are subsidiaries of CoinDesk’s parent business, DCG.
Genesis Global Capital, which filed for bankruptcy in January, claimed Wednesday that DCG and DCGI are “wrongfully in possession of property” from its bankruptcy estate.
The documents stated that DCG wanted to convert these loans into “open loans,” notifying Genesis on May 9 that they had matured and were due. However, the former crypto lender claims Genesis did not consent to this transaction and reserved its rights to repayment.
“The May 9 DCG request for wire instructions for loan repayment at 10:37 p.m. (ET) on May 9, 2023 is not a ‘timely’ request as contemplated in the MLA,” the DCG complaint stated. The May 9 DCG Request cannot constitute timely notice for the May 9 Loan or the May 10 Loan because it was sent on, not before, the Maturity Date for the May 9 Loan and approximately 90 minutes before midnight on the day prior to the Maturity Date.
The two files stated that DCG owes Genesis $500 million and DCGI 4,550.5 BTC (worth $117 million as of press time) as of Wednesday. Genesis wants late fees and interest as “property that the debtor could use” in its bankruptcy case.
DCG spokesperson: “Genesis has agreed to delay the handover action so we may formalise the deal in principle with Genesis, the UCC, and DCG. We will soon file a forbearance agreement with the court. We will distribute monies and continue Genesis creditors’ recovery at that point.”
