Bankrupt crypto lender, Genesis Global Capital, announced on Tuesday that will cease talks regarding a proposed settlement with its parent firm, the Digital Currency Group (DCG). The company has decided to redirect its focus toward pressing a lawsuit against DCG, according to a Genesis representative.
Genesis initiated legal action against DCG in the previous month to recoup roughly $620 million in loans that are still outstanding. However, the company was simultaneously considering an alternative measure to procure funds for its creditors: a repayment scheme previously agreed upon, albeit tentatively, with DCG. The proposed agreement could potentially have enabled unsecured creditors to recover anywhere between 70% to 90% of their original investment. Nonetheless, certain Genesis creditors expressed scepticism towards this plan.
The decision to abandon the proposed settlement and press on with the lawsuit by Genesis follows a fraud suit filed by the New York Attorney General (NYAG) against DCG. However, it is unclear at this stage how this new strategy by Genesis might be impacted by the NYAG’s case.
Learn more about the developments in this case by reading the full report over at Bloomberg Law.