Digital Currency Group (DCG) has sued its lending subsidiary Genesis, asking a bankruptcy court to confirm it is owed more than $105 million plus interest on a financial backstop extended during the 2022 crypto downturn.

The case, filed on Aug. 14 in the U.S. Bankruptcy Court for the Southern District of New York, centers on a $1.1 billion promissory note DCG issued to Genesis after the implosion of hedge fund Three Arrows Capital (3AC).

According to the complaint, 3AC, one of Genesis’s largest borrowers, defaulted on a $2.36 billion margin call in mid-2022, creating a significant deficit in Genesis Asia Pacific’s equity, a DCG-owned entity.

DCG said it injected the note “voluntarily” to stabilize the business, but argued that when crypto markets rebounded, Genesis profited from collateral tied to 3AC far beyond the note’s original value. Those gains, it contends, reduced the principal balance and now leave $105 million outstanding.

In a statement, DCG said it “took extraordinary efforts” to keep Genesis afloat in 2022 and simply wants the court to “confirm” repayment status.

The filing adds another dispute to the strained relationship between the two companies. Earlier this year, Genesis’s litigation oversight committee sued DCG, its CEO Barry Silbert, and other executives, alleging that billions of dollars were wrongfully taken from the lender in 2022.

Genesis, one of several high-profile firms to collapse in the wake of the FTX bankruptcy, halted lending in late 2022 and filed for Chapter 11 protection in early 2023.

It emerged from restructuring last year and began distributing roughly $4 billion to creditors, with recovery amounts varying by asset type. As an equity holder, DCG is among the last to be repaid and has challenged parts of the bankruptcy plan.

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Coinbase has announced plans to raise $2 billion by issuing convertible senior notes to qualified institutional buyers, according to a statement released on Aug. 5.

The offering consists of two separate tranches: $1 billion in notes due 2029 and $1 billion in notes due 2032. These will be sold privately to institutional investors who meet specific qualification criteria.

Offering details

Coinbase stated that the initial purchasers of the notes will have a 13-day option to buy up to an additional $150 million of the 2029 and 2032 notes.

These notes are unsecured senior obligations that will accrue interest paid semi-annually. The 2029 notes will mature on Oct. 1, 2029, and the 2032 notes on Oct. 1, 2032, unless they are repurchased, converted, or redeemed before these dates.

The notes will be convertible into a mix of cash and Coinbase’s Class A common stock, at the company’s discretion. The specific terms, including the interest and initial conversion rates, will be determined when the offering is priced.

Coinbase has also structured capped call transactions for both series of notes, which are designed to minimize any dilution to its Class A shares when the notes are converted. These transactions aim to offset any additional cash payments the company may need to make beyond the converted note’s principal amount, subject to certain limits.

A portion of the net proceeds from the offering will be used to fund the capped call transactions. If the purchasers exercise their options to buy additional notes, Coinbase plans to use some of the additional proceeds to enter into further capped call agreements.

The remainder of the funds raised will be used for general corporate purposes, which may include working capital, capital expenditures, and investments in other companies or technologies.

Additionally, Coinbase may use part of the proceeds to repurchase its Class A common stock shares or repay its outstanding notes as market conditions allow.

Coinbase stock falls

According to Yahoo Finance data, Coinbase’s stock price fell by more than 2% during pre-market trading in response to the announcement. This decline came as part of the mixed reaction to the exchange’s recent quarterly earnings report, which failed to meet analyst expectations.

Compass Point analysts downgraded Coinbase’s stock from “Neutral” to “Sell,” citing growing competition from stablecoins and investor fatigue as key challenges for the company.

Additionally, they lowered their price target for Coinbase from $330 to $248 following a weaker-than-expected revenue performance in Q2.

On the flip side, Benchmark analysts expressed optimism about Coinbase’s prospects. They reiterated their “Buy” rating and raised their target price to $421, noting the company’s expanding services and influence in the institutional crypto sector.

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Crypto Journalist

Amin Ayan

Crypto Journalist

Amin Ayan

About Author

Amin Ayan is a crypto journalist with over four years of experience in the industry. He has contributed to leading publications such as Cryptonews, Investing.com, 99Bitcoins, and 24/7 Wall St. He has…

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June 14, 2025

GameStop has increased its convertible note offering to $2.25 billion, up from the $1.75 billion announced earlier this week, according to a Thursday evening press release.

The move comes just months after a similar $1.5 billion raise in April and follows the company’s recent entry into Bitcoin.

Shares of the Texas-based retailer dropped 24% over the past week, closing Friday at $22.14, despite holding steady after the announcement.

GameStop’s Zero-Coupon Notes Come with 32.5% Conversion Premium

The notes, which bear no interest, carry a conversion price of around $28.91 per share — a 32.5% premium over the stock’s Thursday afternoon average.

The structure mirrors the strategy employed by MicroStrategy, which has used premium note offerings to expand its Bitcoin holdings without immediate dilution.

GameStop first disclosed it had purchased 4,710 Bitcoin in March, pushing the stock above $28 at the time. Whether the company plans to expand its crypto reserves remains uncertain.

CEO Ryan Cohen has made it clear that GameStop won’t emulate other firms or signal its buying patterns. In a recent interview, he declined to say whether more BTC purchases were planned.

The press release kept options open, stating that proceeds would be used for “general corporate purposes,” including investments aligned with GameStop’s investment policy and “potential acquisitions.”

While vague, the language leaves the door open for further digital asset moves.

GameStop’s previous crypto ventures have been mixed. The company launched an NFT marketplace during the last market cycle but shut it down early last year.

At its annual shareholder meeting, Cohen pivoted focus toward trading cards—now making up nearly 30% of quarterly revenue.

“We’re focusing on trading cards as a natural extension of our existing business,” he said.

With capital in hand and crypto already on its books, GameStop could revisit Bitcoin when market conditions align.

223 Companies Hold Bitcoin

A growing list of firms is embracing Bitcoin as a balance sheet hedge or strategic investment. Recent data shows 223 public companies now hold Bitcoin, up from 124 just days earlier.

In total, more than 819,000 BTC, approximately 3.9% of the total supply, is currently held by public firms, according to BitcoinTreasuries.NET.

MicroStrategy remains the largest corporate Bitcoin holder, with 580,250 BTC worth approximately $60.9 billion.

Other major holders include Marathon Digital Holdings and Tesla, both with over $1 billion in Bitcoin.

Last week, Japanese investment firm Metaplanet unveiled an ambitious new target to amass 210,000 Bitcoin by the end of 2027.

As reported, digital asset companies are flooding capital markets to raise funds for large-scale Bitcoin acquisitions, spurred by the cryptocurrency’s rally to a record $111,965 last week.

The surge, up more than 50% from early April, has ignited a wave of listings and mergers as firms race to secure funding while investor appetite remains strong.

Classover, a K-12 education company, has announced a move into crypto through the creation of a Solana reserve.

The company plans to issue up to $500 million in senior convertible notes, with 80% of the proceeds allocated to purchasing Solana (SOL). The move follows a growing pattern of companies expanding into crypto-related strategies along with their core businesses.

According to a June 2 announcement, Classover has already purchased 6,472 SOL worth approximately $1.1 million to start its reserve. The issuance of $500 million in convertible notes comes through a partnership with Solana Growth Ventures.

Classover is an online education company offering learning courses for K-12 students worldwide. On June 3, a day after the announcement, its shares reached $5.45 on the Nasdaq, an intraday rise of 46.5% at the time of publication.

According to the company, the issuance of up to $500 million in convertible notes could be complementary to Classover’s $400 million equity purchase agreement. Combined, these two financing methods would bring the company’s Solana purchasing power to $900 million.

Related: DeFi Development Corp adds $11.5M SOL, shares jump 12%

Solana reserve companies

Classover’s pivot to a Solana reserve company marks a trend of some publicly traded companies turning to SOL to create more revenue streams and spark investor interest.

In May, SOL Strategies, a publicly traded Canadian company, sought regulatory permission to raise up to $1 billion for its SOL staking operations. The company’s Q2 2025 earnings report revealed a rise in validator and staking revenue.

Upexi, also listed on the Nasdaq, saw its shares soar 630% after it announced a $100 million raise in April, with 90% of the funds pledged to SOL purchases.

Magazine: Memecoins are ded — But Solana ‘100x better’ despite revenue plunge

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