Digital Currency Group (DCG) is close to settling with the creditors of its subsidiary, Genesis, Bloomberg said on July 31.
DCG reportedly released its second-quarter shareholder letter on the same day as Bloomberg’s article. In that letter, DCG wrote:
“After months of tireless negotiations led by DCG leadership, we are close to reaching an agreement in principle to resolve the claims in the Genesis Capital Chapter 11 cases … We expect to bring these cases to a close soon …”
DCG additionally stated in its letter that it will provide “material updates” as the claim resolution process approaches its conclusion.
The shareholder letter also revealed that DCG brought in $216 million in revenue in the second quarter, marking a sequential revenue growth of 17%. However, the company also reported a consolidated quarterly loss of about $79 million, primarily attributed to a one-time counterparty default at Genesis costing $113 million.
Bloomberg also reported that the company has appointed Mark Shifke as its new chief financial officer (CFO). Shifke has held past executive roles in the fintech industry at firms such as Billtrust and Green Dot and at traditional financial firms such as JP Morgan and Goldman Sachs. He is seemingly new to the cryptocurrency industry.
Genesis’ bankruptcy began in early 2023
The lending arm of Genesis Global Holdco — a subsidiary of DCG — filed for bankruptcy protection on Jan. 19, at which time it said it owed $3.5 billion to its 50 largest creditors. The company’s prolonged bankruptcy proceedings are still ongoing.
Gemini, a crypto exchange that worked to provide an interest-bearing “Earn” product with Genesis, has been dramatically affected by proceedings. The company is now one of Genesis’ largest creditors. Bloomberg noted that Gemini said on July 28 that it “remains frustrated” with a deal expected to close in mid-July.
Gemini previously launched a lawsuit against DCG and its CEO, Barry Silbert, alleging “fraud and deception” in early July. DCG has denied any wrongdoing. Genesis separately reached an agreement with another creditor, the failed crypto exchange FTX, according to court filings on July 27.
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