DCG says Genesis repayments to exceed owed amounts

abdelaziz Fathi

Digital Currency Group (DCG) has objected to the bankruptcy plan proposed by its subsidiary, Genesis Global Capital.

DCG’s contention centers around Genesis’s plan to offer its customers “additional payouts” that reflect the increased value of cryptocurrencies since January 2023, when Genesis filed for bankruptcy. DCG argues that such payouts exceed what customers and creditors are legally entitled to under U.S. bankruptcy law.

DCG insists that repayments should be based on the value of the crypto assets at the time of the bankruptcy filing, rather than their current, higher market prices. This stance is driven by concerns that Genesis’s approach could leave fewer assets available for DCG after customer repayments are made, given the rise in the value of assets like bitcoin since the filing.

Genesis is currently in the process of liquidating its assets after unsuccessful settlement attempts with DCG, its former business partner Gemini, and regulators. The company did, however, reach a settlement with the U.S. Securities & Exchange Commission (SEC), agreeing to pay the agency $21 million from any remaining assets after customers are fully repaid.

The backdrop to this dispute includes a lawsuit filed by the SEC against Genesis and Gemini Trust, alleging illegal securities sales through their Gemini Earn crypto lending program. This program, launched in December 2020, enabled Gemini customers to lend their crypto assets to Genesis in return for interest, amassing billions in crypto assets from investors. The Earn program’s failure during the crypto market crash in November 2023 has led to litigation involving Genesis, Gemini, and DCG.

Gemini, led by the Winklevoss twins, has supported Genesis’s bankruptcy plan to repay customers who have been unable to access their assets for over 16 months.

The news comes shortly after Genesis Global Trading has reached a settlement with the New York Department of Financial Services (NYDFS), agreeing to pay an $8-million penalty and cease its operations in New York. As part of the settlement, the U.S.-focused spot crypto trading business will surrender its BitLicense, which it has held since 2018.

Genesis’s bankruptcy has had a terrible impact on the Gemini Earn program and has spawned a series of lawsuits, including one by Gemini against Digital Currency Group and its CEO Barry Silbert, alleging fraud. Conversely, Genesis has also sued DCG seeking repayment of loans exceeding $600 million.

  • Read this next

    Digital Assets

    Pyth Network Rolls Out Bitcoin ETF Price Feeds

    The Pyth Network, a leading provider of real-time market data for crypto, equities, FX, and commodities to the DeFi market, has rolled out its latest feature: Bitcoin ETF Price Feeds. These feeds provide real-time, reliable price data for 13 Bitcoin exchange-traded funds, making them accessible to DeFi developers and users. 

    Digital Assets

    Circle to end USDC support on Justin Sun’s Tron Network

    Circle, the company behind the widely-used USD Coin (USDC), announced it will stop supporting its stablecoin on the Tron blockchain. The issuer said the move is part of Circle’s ongoing efforts to ensure USDC maintains its reputation as a trusted, transparent, and safe digital currency.


    JonesTrading deploys FlexOMS for equities, eTrading, outsourced trading

    “Firstly, our aggressive timelines meant that we needed to work with a partner who understood our business and offered flexible yet powerful technology solutions to meet our requirements. That was essentially the baseline.”

    Digital Assets

    First-Ever ICO on Bitcoin Blockchain: $3.1M Raised in Under 6 Days

    Bitcoin Dogs has now raised a total of $3.1M in the first 6 days of its historic presale. The project’s BRC-20 token, 0DOG, is the first-ever ICO on the Bitcoin blockchain.

    Executive Moves

    iSAM Securities hires Aaron Brown for MENa expansion

    “Aaron’s wealth of experience in institutional sales, strong network and in-depth understanding of client requirements in the Middle East will help us to capitalize on recent client demand in the region, whilst delivering the same innovative, high-quality products and services we offer to all our clients globally.”

    Fundamental Analysis

    Global FX Market Summary: EUR, Fed Minutes February 21, 2024

    Hawkish Fed minutes could strengthen USD, dovish BoE hints could boost euro, mixed economic data leaves impact unclear, FOMC minutes release today holds the most weight.

    Digital Assets

    360T launches Crypto NDF offering

    “By launching our crypto offering with non-deliverable derivatives products, we are allowing our diverse, global client base to engage with the crypto market without the need to build or invest in Distributed Ledger Technology (DLT) infrastructure. Looking ahead, we will continue to work with our industry partners to expand 360T’s crypto.”

    Technical Analysis

    FTSE 100 index Technical Analysis Report 20 February, 2024

    The FTSE 100 index is likely to fall to support level 7600.00 after reversing from resistance level 7750.00.

    Retail FX

    Afterprime enhances trade reporting with PrimeXM and TRAction

    “This collaboration has made setting up EMIR and MIFIR reporting for our CySEC entity a breeze, allowing us to maintain our focus on providing best-in-class pricing and top-notch customer service.”