According to CryptoPotato, the Digital Currency Group (DCG) has completed the payoff of all short-term loans from its bankrupt subsidiary Genesis. Over the past year, DCG has paid off more than $1 billion of debt to various creditors, directing nearly $700 million towards Genesis and fulfilling all its current obligations.
Barry Silbert, the founder and CEO of Digital Currency Group, confirmed the development and expressed excitement about the industry's next chapter and DCG's leadership role in it. Genesis filed for bankruptcy in January 2023 after ceasing withdrawals in November 2022. In September, Genesis initiated legal action against its parent company to recover an overdue loan amount exceeding $610 million, set to mature in May 2023. Court documents revealed that DCG had a total debt exceeding $1.7 billion owed to the lender and other creditors.
In November, Genesis and DCG struck a repayment deal, with the parent company committing to paying $200 million. The outstanding loan amount must be settled with Genesis by April 2024, according to the terms outlined in the plan approved by the federal bankruptcy court. DCG is set to maintain its current ownership structure until the conclusion of Genesis' bankruptcy proceedings, with its ownership stake in Genesis required to remain above 80% until the lender's Chapter 11 plan receives approval or undergoes conversion into a Chapter 7 proceeding. This decision enables Genesis to maintain its safeguard within DCG's tax consolidated group, preserving the potential value of federal net operating loss carryforwards (NOLs) and potentially preserving benefits on $700 million in NOLs.
