Digital Currency Group achieves a significant financial milestone in resolving debts with its bankrupt subsidiary Genesis.
In a significant stride toward financial resolution, Digital Currency Group (DCG) announced on Friday that it has successfully cleared all its short-term debts with Genesis, its now-bankrupt subsidiary. This accomplishment brings DCG's total repayments to creditors to an impressive figure exceeding $1 billion, with nearly $700 million of that amount directly settling debts with Genesis.
The move comes after a tumultuous period marked by legal confrontations. In September, Genesis initiated legal action against DCG, seeking to reclaim an outstanding loan of over $610 million that was due in May 2023. Court documents at the time revealed DCG's substantial debt load, owing upwards of $1.7 billion to Genesis and various other creditors.
Additionally, Genesis had pursued the recovery of 4,550 BTC, valued at approximately $199 million as of Friday. However, a breakthrough came in November when DCG agreed to a settlement plan, committing to an immediate $200 million payment, as described by Genesis' attorney. The plan, sanctioned in federal bankruptcy court, outlines a schedule for DCG to settle the remaining balance owed to Genesis by April 1.
This repayment trajectory aligns with a recent court decision dictating that DCG must maintain at least an 80% ownership stake in Genesis throughout the subsidiary's bankruptcy process. This condition ensures Genesis stays within DCG's tax consolidated group, safeguarding the potential value of federal net operating loss carryforwards (NOLs). These NOLs are a significant financial asset, potentially allowing Genesis to offset future profits with losses up to $700 million.
Reflecting on this financial milestone, DCG expressed optimism about the future, stating, “With this milestone behind us, we’re looking forward to the next chapter of DCG and the future growth of our industry,” and affirming their commitment to uphold financial responsibilities. As DCG turns the page on this chapter of its financial saga, the company's recent actions demonstrate a concerted effort to stabilize its position and move forward with renewed focus and responsibility.