Digital Currency Group (DCG) is suing its subsidiary, Genesis, claiming that a $1.1 billion loan issued to the now-bankrupt crypto lender was sufficient to cover its losses and that Genesis has profited since its collapse in 2022. DCG argues in its recent lawsuit that the rise in the value of recovered assets, particularly from Three Arrows Capital, has eliminated any obligation under the promissory note. Genesis had previously filed a lawsuit against DCG seeking $3.1 billion, alleging improper asset transfers as it faced financial issues during the crypto market downturn. The controversy began when Genesis faced insolvency due to significant loans to failing firms like Three Arrows Capital and FTX. Following the events, DCG provided capital support to assist in repaying Genesis customers. Now, DCG claims that the appreciation of cryptocurrencies post-collapse indicates that Genesis has actually benefited financially, contradicting its claims of loss. The legal battle underscores the severity of financial interdependencies and the impacts of cryptocurrency volatility on associated firms.

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