- The Digital Currency Group is looking to refinance the $1.7 billion debt it owes to its bankrupt subsidiary Genesis.
- Barry Silbert’s crypto behemoth is in talks with investors to raise capital to facilitate further growth.
- DCG has indicated that it won’t be able to repay a $630 million loan from Genesis that will mature this week.
Digital Currency Group, the digital conglomerate behind crypto heavyweights like GBTC issuer Grayscale Investments, appears to be on the path to default on a half-a-billion-dollar loan owed to its bankrupt subsidiary Genesis. The loan is part of an approximately $1.7 billion exposure that Genesis has to DCG, which consists of a loan and a promissory note.
Digital Currency Group Is Looking To Raise Capital
According to a report by Bloomberg, the Digital Currency Group, led by crypto entrepreneur Barry Silbert, is seeking to refinance the debt owed to Genesis, which is made up of a $630 million loan and a $1.1 billion promissory note. While the promissory note is due in June 2023, the $630 million loan is set to mature this week, between May 9 and 11 to be precise.
Genesis is currently undergoing a restructuring process as part of its Chapter 11 proceedings. Last week Genesis agreed to enter a 30-day mediation period with DCG, Gemini, and its Unsecured Creditors Committee, in order to fast-track the resolution and work out repayment. Gemini and its UCC have a vested interest in DCG’s repayment to Genesis since it will pave the way for allowing its creditors to be made whole.
We are committed to reaching a fair outcome for all and look forward to a productive resolution during this mediation period.”Digital Currency Group
The Digital Currency Group has stated that it is in talks with investors to raise additional capital to further its growth. The extra capital will also provide financial flexibility with regard to the outstanding obligation to Genesis. However, in the meantime, the crypto conglomerate seeks to refinance the loans owed to its subsidiary. As for the $630 million loan that matures this week, it is safe to assume that it will not be paid back to Genesis.