DCG completes repayment of US$1 billion in short-term loans, Genesis receives US$700 million
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Digital Currency Group (DCG) announced that it has repaid all short-term loans totaling more than $1 billion, a major step toward financial stability.
Genesis received about $700 million of that amount.
As a major player in supporting the emerging financial system, DCG plans to move forward while committing to meet its financial obligations.
Last month, DCG founder Barry Silbert resigned from Grayscale’s board of directors. The move comes ahead of an expected decision by the U.S. Securities and Exchange Commission (SEC) on a spot Bitcoin ETF. Silbert’s resignation was disclosed in a filing with the Securities and Exchange Commission, with Mark Shifke taking over as the new chairman.
The change, along with the board’s appointment, precedes legal challenges, including a $1 billion fraud lawsuit filed by New York Attorney General Letitia James.
Legally, the judge ruled that DCG is not allowed to make ownership changes within Genesis until Genesis successfully emerges from bankruptcy. The decision brings Genesis under the umbrella of the DCG tax consolidation group, providing certain benefits during its insolvency.
These protections will continue until the Chapter 11 plan takes effect or potentially transitions to a Chapter 7 case, underscoring the importance of DCG maintaining an ownership stake of more than 80% to preserve underlying value.
In October 2023, DCG reported revenue growth of 23% to $188 million in the third quarter of the year, as the cryptocurrency market recovered. There was also mention of huge repayments to bankrupt cryptocurrency lender Genesis. The market’s recovery at the time was partly due to expectations that U.S. cryptocurrency regulators would approve a Bitcoin spot ETF.
The company appeared to have some positive financial indicators, however, DCG affiliate Genesis Global Trading decided to terminate its cryptocurrency spot trading operations, citing undisclosed “business reasons.”
The move comes after Genesis Global Holdco filed for bankruptcy in January 2023 as it specialized in providing cryptocurrency loans.
Despite the suspension, Genesis Global Trading has ensured the continuity of its spot and derivatives trading services through GGC International, a trading company registered in the British Virgin Islands.
