Capital venture company Digital Currency Group (DCG), the parent company of many entities linked to cryptocurrency and blockchain, filed a complaint against two of its subsidiaries on a note to protect itself against the defect of 2022 of Three Arrows Capital (3AC).
In a Thursday file before the American bankruptcy court of the South District of New York, DCG alleged that Genesis Global Capital and Genesis Asia Pacific, both within the framework of the venture capital company, owed the overpaye of their parent company according to the 3ac recovery.
The complaint indicated that DCG had issued a note with a promise of $ 1.1 billion to Genesis entities, which took advantage of “hundreds of millions of dollars” without undergoing any loss of the 3AC defect in 2022.
According to DCG, the company published a note at 10 years at Genesis Global Capital in June 2022 as a safeguard against any potential “hole” in the equity of Genesis Asia Pacific who could have been caused by the collapse of 3ac, one of the borrowers of Genesis. DCG allegedly allegedly faced with significant 3ac, Genesis “Reap liquidity problems[ed] A massive windfall ”and was forced to return the payments made to the order ticket.
The recent complaint was only the last legal tangle between DCG and Genesis on the collapse of 3ac. In May, Genesis brought prosecution against his parent company, the affiliates and CEO Barry Silbert, alleging fraud, enrichment of initiate and hidden transfers. The company asked for $ 3.3 billion on the DCG which would have withdrawn the funds before Genesis’ bankruptcy.
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The 1.1 billion dollars promise ticket mentioned in the file was issued in response to the collapse of 3ac, a potentially confronted genesis with a deficit in its equity for the second quarter of 2022.
However, DCG noted that “the prices of cryptocurrencies have finally recovered”, allowing Genesis to use 3ac guarantees – Bitcoin Trust of Graycale, which increased in value with the price of cryptocurrency – to take advantage of loans.
“”[T]The incremental amounts carried out by Genesis after the publication of the note were, on the basis of the procedural acts filed by Genesis before this court, requesting the approval of this transaction, much more than sufficient to overcome the collateral deficit of 1.1 billion dollars – and, on information and belief, allowed Genesis to take advantage of the benefit of the profit [3AC]By default by recovering nearly $ 2.8 billion in the $ 2.36 billion of origin [3AC] Loans, ”said the file.
The fall of FTX was taken in the mixture
The 2022 cryptography market crash, which, according to many experts, had been influenced by the collapse of the terra ecosystem, has led to several bankruptcy and liquidity problems, many retail investors losing millions. In the midst of the uncertainty of the market, FTX, one of the greatest exchanges of cryptocurrency of the time, filed for a bankruptcy, and some of its leaders were charged with fraud.
“While [Genesis Global Capital’s] The direct exposure to Credit to the FTX was not important, the bankruptcy of the FTX caused the equivalent of a tsunami in the crypto world, causing wide and lasting effects, especially [Genesis Global Capital’s] The bankruptcy deposit on January 19, 2023 due to the “ race on the bank ” which followed in November 2022 and made Genesis stopped withdrawals, “said the file, adding:
“Even had [3AC] not defined in June 2022, [Genesis Global Capital] would not have had enough capital to resist the rout of the unexpected and devastating market which followed the collapse of the FTX in November 2022, which also led the cryptographic lender Blockfi to deposit the bankruptcy of chapter 11 in the same month. »»
After filing the bankruptcy of Genesis, the company completed its restructuring plan in August 2024 and announced and the disbursement of around $ 4 billion in the affected parties. DCG asked the Genesis court to pay more than $ 105 million more interest.
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