Genesis Global Capital has filed a lawsuit against Digital Capital Group for defaulting on exorbitantly large amounts of loans. Genesis Global Capital has not received the agreed-upon funds back as of May 2023, per the terms and conditions stipulated by the two corporations.
Genesis has hired attorneys to defend itself in this dispute, and they claim that in 2019, Genesis and DCG signed a master loan arrangement. In the case that was submitted to the US Bankruptcy Court for the Southern District of New York, this detail was included.
The lawsuit also references the fact that the loan Genesis gave to DGC was worth more than 18,000 BTC. This was in 2022. The loan was then converted to a fixed-term loan with a May 11 maturity date. The lawsuit claims no return was seen once the maturity date passed.
The Genesis lawyers additionally informed in another filing that in November 2022, Genesis Global Capital and DGC began working on a revised and restated master loan agreement.
According to a spokesperson from DGC, Genesis has decided to put a stay order in place, and in the meantime, they will ensure the deal that was mutually agreed upon by Genesis, the UCC, and DCG gets documented. The documentation will be for a forbearance agreement and will be duly filed. Following that will be the allocation of funds to the creditors of Genesis.
Genesis Global Capital Holdco was financially affected by the 2022 bankruptcy of Three Arrows Capital, a crypto hedge fund and exchange. At that time, the initiative to file for bankruptcy protection was taken, leaving all creditors in a state of chaos.
Since then, Genesis and DCG have been embroiled in a legal conflict with the exchange Gemini, which was responsible for prosecuting DCG and the company’s CEO, Barry Silbert. According to the accusation, Silbert was the driving force behind the DCG and Genesis debacles. Cameron Winklevoss, co-founder of Gemini, issued an ultimatum to Silbert, demanding that he immediately pay $640 million to Gemini’s Earn clients or face legal action.