Digital Currency Group, DCG, a global investment firm, has filed a lawsuit against its subsidiary Genesis Global Capital LLC. The lawsuit centered around a $1.1 billion promissory note issued during the 2022 crypto market crash. Details of the DCG Lawsuit DCG revealed in a complaint that it tried to fix a potential “hole” following the collapse of crypto hedge fund Three Arrows Capital in 2022. According to a report from The Block , DCG noted that Genesis was heavily exposed to Three Arrows Capital through a $1.1 billion promissory note. The firm added that Three Arrows did not satisfy a margin call by Genesis in 2022. This resulted in a $2.36 billion default, which left a gap in the book value of GAP’s (Genesis Asia Pacific Pte. Ltd.) equity. To address this gap, DCG voluntarily made a unilateral contribution to Genesis. According to the lawsuit filing, Genesis made massive gains from the TAC Collateral above the value after crypto prices rebounded. DCG claimed that subsequent recoveries from the TAC Collateral reduced the principal amount of the note on a dollar-for-dollar basis. Consequently, DCG has requested the court to order Genesis Global Capital to pay it over $105 million plus interest. DCG and Genesis Continue Post-Crash Saga The lawsuit marks the latest in the saga between Genesis and DCG. In May, Genesis, through its Litigation Oversight Committee (LOC), filed counter-lawsuits against DCG, alleging fraud and mismanagement. Genesis accused DCG, its CEO, Barry Silbert , of improper business conduct in handling the firm and its funds during the most critical years leading up to bankruptcy. In the May lawsuit, Genesis LOC sought to recover at least $2.2 billion in Bitcoin (BTC), Ethereum (ETH), and other crypto. How Genesis Woes Started Genesis was heavily affected by the 2022 crypto market turmoil. This includes the collapse of the algorithmic stablecoin Terra USD and, later, the downfall of the FTX exchange . Following the crypto market downfall, Genesis froze its lending operations. Subsequently, Genesis filed for bankruptcy in 2023 and completed its subsequent restructuring in August 2024. So far, Genesis has distributed about $4 billion in assets to creditors. DCG, as an equity holder, is last in line for repayment. However, the firm has contested the bankruptcy plan, arguing it unfairly prioritizes creditors over its interests. The post DCG Sues Genesis Global Capital Over $1.1B Promissory Note appeared first on TheCoinrise.com .
