Digital Currency Group (DCG) has reportedly repaid its entire debt to the bankrupt cryptocurrency lender Genesis. However, an ad hoc group of Genesis creditors has disputed this claim in court papers filed in the Southern District of New York Bankruptcy Court. They argue that DCG still has a substantial debt remaining, with unpaid interest and late fees amounting to $26 million.
The creditors raised concerns about the form of payment on Jan. 8, stating, “Nothing in the Partial Repayment Agreement permits the DCG Entities to satisfy their USD and BTC [Bitcoin] obligations in any asset other than USD and BTC and certainly not via the transfer of illiquid instruments which cannot be monetized or distributed to creditors in satisfaction of their claims against the Debtors.”
The “illiquid instruments” they referred to are Grayscale Ethereum Classic Trust (ETCG) and Grayscale Ethereum Trust (ETHE), which were held as collateral. As of early December, ETCG was selling at a 69% discount to its net asset value, and ETHE was selling at a 50% discount. These funds have not been approved by the United States Securities and Exchange Commission (SEC) and are sold over the counter.
The creditors added that a true accounting will only be possible after the ETCG and ETHE shares have been monetized and used to purchase Bitcoin, with the cost of the purchase paid by DCG.
A statement filed on Jan. 8 by the official committee of unsecured creditors indicated that DCG stated that, under the partial repayment agreement as amended on Nov. 28, DCG agreed that the aggregate principal amount of its loans was 2,737.77102141 BTC and 14,048 Bitcoin Cash (BCH), with late fees of 10.12600241 BTC.
DCG announced the repayment of its loans from its affiliate Genesis on Jan. 5. Genesis had halted withdrawals in November 2022 and filed for Chapter 11 bankruptcy in January 2023. DCG has not yet responded to a request for comment about the creditors’ claims.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | North America |
| Countries | 🇺🇸 |
| Sentiment | negative |
| Relevance Score | 1 |
| People | None |
| Companies | Genesis, Southern District of New York Bankruptcy Court, Grayscale Ethereum Classic Trust (ETCG), Grayscale Ethereum Trust (ETHE), Digital Currency Group (DCG), United States Securities and Exchange Commission (SEC) |
| Currencies | Ethereum, Bitcoin, united states dollar |
| Securities | Grayscale Ethereum Trust (ETHE), Grayscale Ethereum Classic Trust (ETCG) |
