Digital Currency Group and Genesis have settled their legal scores.
The settlement might trigger a change in dynamics in the Genesis vs. Gemini pursuits.
In a landmark development for the crypto industry, Bitcoin (BTC) giant, Digital Currency Group (DCG) and Genesis Global have settled a lawsuit, culminating in a $275 million repayment plan, according to a recent court filing.
Notably, the settlement comes at the time Bitcoin, the world’s top cryptocurrency reclaimed the $38,000 price mark, jumping to $38,187, up 2.9 percent in the past 24 hours.
Background of DCG’s Settlement With Genesis
DCG, founded by Barry Silbert, has been a prominent participant in the crypto space, operating as a venture capital firm that invests in blockchain and digital currency companies. Genesis Global, a subsidiary of DCG, is one of the leading crypto lending firms that facilitates large trades featuring cryptocurrencies.
In September, Genesis filed a lawsuit against DCG, alleging the wrongful possession of loans totaling over $620 million. The lawsuit sought repayment, interest, and fees amidst Genesis’ ongoing bankruptcy proceedings. The legal battle escalated over the past months, creating uncertainty in the industry and raising questions about the financial stability of the involved parties.
However, DCG has now reached a settlement plan with Genesis. As part of the settlement, it was revealed that DCG has already paid approximately $227.3 million of the $620 million it owes to Genesis. The agreed-upon repayment plan involves DCG disbursing an additional $275 million to Genesis in three installments, with the final payment scheduled to be completed by April.
As revealed in the filing, the payments will be done in part in US dollars and partly in Bitcoin. This demonstrates the increasing integration of cryptocurrencies into traditional financial transactions.
In addition to the repayment structure, the settlement includes a $35 million upfront payment. Moreover, a $10 million holdback from the recent sale of CoinDesk, a media outlet formerly owned by DCG, is also part of the deal. Furthermore, DCG is using Grayscale Trust shares as security for the agreement, providing an added layer of assurance for the involved parties.
Implications of the Settlement
While the settlement does not entirely cover DCG’s overall debt to Genesis, which stands at $324.5 million, it is an important step toward resolving the legal issue and avoiding lengthy and costly litigation. By agreeing on a repayment schedule, both companies hope to avoid protracted legal battles that could harm their operations and reputations in the crypto market.
It is, however, worth mentioning that the proposed settlement is subject to approval by creditors. This adds an additional complexity to the resolution process. Creditors will play a crucial role in determining whether the terms of the settlement adequately address their concerns and financial interests.
Overall, the approval process will shed light on the broader industry sentiment regarding such disputes and their resolution within the crypto space. It may also shift the paradigm in the pending legal brawl between Genesis itself and the crypto exchange Gemini.
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