By
Mayowa Adebajo
April 29th, 2024
The Digital Currency Group has hinted that they could be making creditor payments for Genesis Global soon and plan to resolve all the claims.
Crypto giant Digital Currency Group (DCG) has recently given its second-quarter financial update telling shareholders that they are pretty close to resolving the claims in the Chapter 11 bankruptcy case involving its crypto lending unit Genesis Global.
The update comes a month after crypto exchange Gemini filed a lawsuit against Genesis while alleging fraud. In its letter to shareholders and investors, Digital Currency Group noted:
“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.”
Genesis’ lending business faced financial difficulties and filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the Southern District of New York earlier this year. The crisis that affected the cryptocurrency lending market in 2022 caused significant challenges for the company.
Genesis came under stress, particularly after the collapse of the crypto exchange FTX. At the time of its bankruptcy filing, Genesis owed a total of over $3 billion to creditors. Of these, they owe $1 billion to Gemini alone.
Digital Currency Group Appoints New CFO
DCG made some updates within its group of companies. They hired a new CFO, Mark Shifke, who had previous experience in CFO roles at Billtrust and Green Dot. Before that, he worked at JPMorgan Chase in mergers and acquisitions and corporate finance.
The previous CFO, Michael Kraines, left his position on May 2 after two years. During the transition, Mark Murphy (the firm’s president) and Simon Koster (chief strategy officer) temporarily handled the finance department while they searched for a replacement.
Shifke’s arrival is significant for DCG as the company reported a consolidated EBITDA loss of $79 million in the second quarter. They are also considering selling some of their businesses. Excluding Genesis, the company’s EBITDA run rate was approximately $244 million. Additionally, their media company CoinDesk generated $15 million from the Consensus conference held in April.
The Digital Currency Group is currently planning for some financial transactions that also include the partial sale of CoinDesk. Additionally, they are also looking for strategic investors for its crypto exchange Luno. “With positive momentum and feedback from the market, we have held discussions with numerous interested parties over the last few months and these processes are progressing,” the firm said.