Controversy Arises as Genesis Creditors Challenge DCG’s Claim of Full Debt Repayment Digital Currency Group
(DCG) is facing allegations from an ad hoc group of lenders, claiming that DCG has not fulfilled its repayment requirements
to its bankrupt subsidiary, Genesis Global. Despite DCG’s recent announcement
on X that it had fully repaid short-term loans from Genesis, the lenders assert that DCG entities still owe significant sums in both USD and BTC. Genesis and other debtors claim
that DCG owes an undetermined amount of bitcoin, along with $26 million in interest and late fees, as specified in the repayment agreement and master loan agreements. The lenders allege that DCG transferred $189 million in US dollars, along with the relinquishment of certain ETHE (Grayscale Ethereum Trust) shares and illiquid ETCG (Grayscale Ethereum Classic Trust) shares,
purportedly to settle its BTC obligations. However,
Genesis claims it cannot determine the outstanding bitcoin obligations until it sells the ETHE and ETCG and converts the proceeds into bitcoin, with the associated costs to be borne by DCG. As of early December,
ETCG was trading at a 69% discount to its net asset value, and ETHE was trading at a 50% discount. These funds, not approved by the US Securities and Exchange Commission,
are sold over the counter. The creditors anticipate a true accounting after monetizing
ETCG and ETHE shares, with the proceeds used to purchase Bitcoin, funded by DCG.
