DCG Opposes Genesis Capital's Bankruptcy Plan Over Legal Concerns

Digital Currency Group (DCG) opposes Genesis Capital's bankruptcy plan, arguing it breaches legal codes. Genesis Capital, a crypto lender, has encountered objections from DCG concerning its bankruptcy plan. The crux of the issue lies in Genesis' proposal to offer customers more than what is legally mandated, prompting DCG to file a motion on February 5, citing violations of the bankruptcy code. DCG supports a plan that ensures creditors receive 100 cents on the dollar, contending that Genesis' plan disproportionately benefits certain creditors while depriving DCG of its rightful economic and corporate governance rights. Genesis Capital is liquidating $1.6 billion worth of assets due to the 2022 crypto bear market and has reached a settlement with the SEC, agreeing to pay $21 million. Additionally, in November 2023, Genesis and DCG reached an agreement wherein DCG committed to repaying Genesis's outstanding loans amounting to $324.5 million by April 2024. The ongoing dispute between Genesis Capital and DCG raises crucial questions about bankruptcy proceedings within the crypto lending sector, potentially setting a precedent for the industry.