According to Blockworks, Digital Currency Group (DCG) announced on Friday that it has paid off its short-term loans from its bankrupt subsidiary Genesis. This disclosure indicates that DCG's total debt payoff to creditors amounts to over $1 billion, including nearly $700 million paid to Genesis alone. In September, Genesis sued its parent company in an attempt to recover an outstanding loan balance of more than $610 million, which was due to mature in May 2023. Court filings from September revealed that DCG owed over $1.7 billion to Genesis and other creditors.
In a separate complaint filed in September, Genesis also sought to recover 4,550 BTC, valued at approximately $199 million as of Friday. The crypto lender reached an agreement with DCG in November, under which the parent company agreed to pay $200 million over the following few weeks, according to a lawyer for Genesis. The remaining loan balance is due to Genesis by April 1, as stipulated in the plan signed off in federal bankruptcy court.
The payment comes after news that DCG will not make any changes in its ownership until Genesis' bankruptcy proceedings conclude. DCG's stake in Genesis must remain above 80% until the lender's Chapter 11 plan is approved or it is converted into a Chapter 7 proceeding. This ruling allows Genesis to stay protected under DCG's tax consolidated group, potentially preserving the value of the federal net operating loss carryforwards (NOLs), a tax benefit that would enable Genesis to deduct losses from future profits. Genesis stands to retain benefits on $700 million in NOLs.
DCG said in a statement on Friday, 'With this milestone behind us, we're looking forward to the next chapter of DCG and the future growth of our industry. And as always, we will continue to honor our financial commitments.'
