Genesis, Digital Currency Group reach agreement on new settlement plan
Court filings showed that both companies were in favor of implementing the amended settlement plan so they can shift their focus to the NYDAG lawsuit.
The filing includes an amended settlement plan that both companies have agreed on and urged other stakeholders to vote in favor.
In a complex bankruptcy case, Genesis Global had previously filed a lawsuit against DCG, seeking redress for allegedly wrongful control over loans amounting to more than $600 million. The new settlement plan, if finalized, would mark a pivotal turn in the case, potentially averting a protracted legal battle.
New settlement plan
According to the latest bankruptcy filing, DCG has already settled a portion of its debt to Genesis Global, amounting to roughly $227.3 million.
The proposed settlement outlines further payments from DCG, totaling an additional $275 million, to be paid in a combination of U.S. dollars and Bitcoin. These payments are scheduled to be completed by April 2024 in several installments.
An intriguing aspect of the deal includes a $35 million initial payment alongside a $10 million reserve from the recent divestiture of CoinDesk. Additionally, shares from Grayscale Bitcoin Trust are being earmarked as collateral, adding another layer of security to the agreement.
While the proposed settlement falls short of covering the total debt DCG owes to Genesis Global — roughly $324.5 million — it signifies a strategic move to circumvent the costs and uncertainties of extended legal proceedings. Both parties seem poised to benefit from this arrangement, as it offers a more immediate resolution and minimizes potential legal expenses.
Alongside this litigation, the companies are also facing legal action from the New York District Attorney General over allegations of fraud. If finalized, a swift settlement would allow the companies to focus on defending the government’s lawsuit.