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One of the things that has been worrying cryptocurrency investors since January is the Genesis bankruptcy process. This bankruptcy, which could have triggered a major disaster in the markets, could also determine the fate of DCG, which manages a community of billions of dollars worth of crypto companies. But today, we have good news.
Current Status of Genesis Bankruptcy
Genesis, the largest crypto lending institution in the bull market of 2021, has filed for bankruptcy. This credit spiral was also partly responsible for setting the stage for the last bull season. We saw that the growth of hedge funds and investment firms supported by crypto loans turned into a bubble, and it burst with the bankruptcy of Terra. Now, efforts are underway to rescue Genesis, the largest crypto lending institution.
Grayscale, CoinDesk, Genesis, and many other massive crypto companies operate under the DCG umbrella. DCG, representing the largest group of crypto companies, announced the good news today. Digital Currency Group (DCG) stated in its court application today that it has reached a preliminary agreement with Genesis creditors to resolve its issues.
Genesis Creditors
Genesis, which applied for Chapter 11 bankruptcy protection in January, stated in the filing that it currently has obligations, including the payment of approximately $630 million in unsecured loans due in May 2023 and $1.1 billion in unsecured notes due in 2032.
According to the preliminary agreement, DCG plans to provide new borrowing facilities and a repayment agreement. These include a two-year, $328.8 million first loan and a seven-year, $830 million second loan. According to the filing, DCG also plans to make a $275 million payment in four installments. If the filing plan is completed, an estimated recovery rate of approximately 70% to 90% in US dollar equivalent is targeted for unsecured creditors.
Genesis has a total debt of $3.6 billion to 50 creditors, including the Winklevoss brothers’ crypto exchange Gemini.
