Bankrupt lender Genesis claims that Digital Currency Group owes roughly $500 million in loans, while DCG International owes roughly 4,550 bitcoin, worth around $116 million at the time of publication.
In filings filed on Wednesday, Genesis claims that DCG is “wrongfully in possession of property” that belongs to the GGC estate.
The loans, which are divided into three sums of $100 million and one of $200 million, reached maturity back in May of this year.
“Because the DCG Loans were not repaid on their respective Maturity Dates or converted to Open Loans, nor was the termination of any of the Loans suspended, the amounts due to GGC pursuant to the DCG MLA include applicable Late Fees,” Genesis said. They added that the late fees will continue to accrue.
On May 9, Genesis says that DCG submitted a wire instructions request, expressing a desire to convert the loans into open-ended loans. However, Genesis did not agree and just wishes to be repaid. The filing continues to say that the wire instruction request came in at 10:37 pm ET on May 9, which it did not consider a “timely request.”
Furthermore, a GGC representative got back to DCG on the wire instructions before midnight.
“DCG should be directed to turn over the Principal Amount to the GGC estate,” the filing argues.
“Genesis has agreed to stay the turnover action so that we can move forward with documenting the deal in principle that was reached with Genesis, the UCC, and DCG. We are documenting a forbearance agreement and expect to file it with the court shortly,” a DCG spokesperson told Blockworks via email. “At that point, we will initiate the distribution of funds and continue on the path to significant recovery for Genesis creditors.”
In a separate filing, Genesis accuses DCG International of not repaying 4,550 bitcoin.
Back in June 2022, Genesis and DCGI agreed to an “open-term loan” of roughly 18,690 bitcoin. DCGI partially repaid the loan, leaving roughly 4,550 bitcoin unpaid.
Similarly to DCG, the loan matured back in May and has not been repaid.
“On May 9, 2023, DCGI sent to GGC a request that it ‘suspend the termination’ of the DCGI Loan, which was due to mature on May 11, 2023, and to reinstitute the DCGI Loan ‘as an Open Loan (as defined in the MLA) consistent with [GGC and DCGI’s] prior course of dealing.” However, Genesis did not agree to suspend the termination of the loan.
“Therefore, because the outstanding balance under the DCGI Loan was not repaid, it matured on May 11, 2023 and is currently payable,” the filing said.
The DCGI loan has also racked up late fees, according to Genesis.
This is not the first loan that matured without DCG paying it back. Gemini claimed in May that DCG missed a $630 million payment. Blockworks reported earlier this year that Gemini had warned of DCG defaulting.
Updated Sept. 6, 2023 at 5:50 pm ET: Added statement from DCG.
Get the day’s top crypto news and insights delivered to your email every evening. Subscribe to Blockworks’ free newsletter now.
Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from Blockworks Research’s Daily Debrief.
Can’t wait? Get our news the fastest way possible. Join us on Telegram and follow us on Google News.
Source: https://blockworks.co/news/dcg-owes-600m-genesis-says