Why Digital Currency Group is suing its subsidiary with more than $1.1 billion in loans

The Digital Currency Group sued the subsidiary Genesis, claiming that the collapsed code lender actually profits over the long term after the collapse and subsequent relief.

In a lawsuit filed Thursday, DCG said the $1.1 billion loan it gave to Genesis in 2022 would ultimately be enough to cover the losses.

The Genesis of the Crypto Lender I’m bankrupt Just like I lent money in 2023 It fell Crypto Firms Three Arrows Capital and other companies are “Crypto Contagion” that spread across the Bear Market and industry in 2022.

DCG intervened with Capital to help Genesis customers repay them. However, in Thursday’s lawsuit, DCG alleged that the obligations under the promissory notes have been reduced to zero as the value of the collateral recovered from the three arrow capital increased.

This is because Three Arrows Capital’s assets were in Bitcoin and Grayscale Bitcoin Trust stocks, which have been in value since 2022.

“Genesis ultimately did not suffer any losses from the TAC default. Rather, Genesis benefits from hundreds of millions of dollars (Genesis is entitled to maintain),” the lawsuit said.

“Because of a significant assessment of the cryptocurrency value since the petition date, this has resulted in a recovery that exceeds the dollar value of the creditor’s claim as of the petition date.”

Decryption I contacted DCG for comment but did not receive a response immediately.

Genesis was a crypto lender operating Crypto Behemoth DCG. Users were able to acquire crypto-holdings by allowing them to be loaned to others.

Genesis has provided billions of dollars in loans to plagued crypto companies such as Three Arrows Capital and FTX-related Alameda research. Terra’s collapse.

Mega Digital Asset Brand FTX It fellGenesis has announced to its clients that it will suspend its withdrawal from its lending sector due to “unprecedented market turmoil.”

The lawsuit on Thursday comes after Genesis in May I sued DCG claims that parent company and CEO Barry Silvert had collapsed in 2022, resulting in fraudulent transfers from lenders. This seeks $3.1 billion in damages.