In a statement, DCG wrote:
“Over 99% of the more than 200,000 Genesis claimholders are receiving a full recovery. In addition, the majority of crypto claimholders who are not receiving a full in-kind recovery are nevertheless receiving significant recoveries which in most cases represent returns in excess of 100% relative to petition date prices.”
Here is the short event summary:
Since the market contagion in 2022 involving Three Arrows Capital and FTX, Digital Currency Group (DCG) and its subsidiary Genesis faced significant financial challenges. The collapse of FTX, once valued at $32 billion, triggered a liquidity crisis that affected numerous companies in the crypto space, including Genesis, which had significant lending relationships with both 3AC and DCG. This situation led Genesis to file for Chapter 11 bankruptcy, revealing liabilities ranging from $1 billion to $10 billion and over 200,000 creditors seeking recovery.
The interconnectedness between DCG and Genesis was critical, as DCG had borrowed substantial amounts from Genesis, which ultimately contributed to the financial strain when Genesis faced losses from its loans to 3AC and the fallout from FTX. After 18 months of restructuring efforts, DCG successfully repaid more than $1 billion to creditors, allowing over 99% of Genesis claimholders to receive full recoveries. However, a remaining debt of $1.1 billion is due to Genesis in 2032.
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