Digital Currency Group reaches agreement with Genesis, set to wind down its loan book
|- Digital Currency Group and Genesis’s in-principle agreement will also prevent the sale of its entities.
- The infamous 10-year promissory note worth $1.1 billion is also going to be equitized.
- The total crypto market capitalization is maintaining its presence above the $1 trillion mark.
The Digital Currency Group (DCG) and Genesis have been making headlines for weeks now. The crypto lender filed for bankruptcy last month, and the heat surrounding the development is only starting to subside. On the other hand, DCG is attempting to fix it all in one go.
Digital Currency Group supports Genesis
Genesis, which has been attempting to pull itself out of the troubles that began back in November last year, seems to have finally come to an end. The bankrupt lender’s parent company Digital Currency Group announced that it reached an agreement with Genesis. According to the agreement, DCG discussed the restructuring of the company.
The agreement, which will bring an end to most of the major issues surrounding Genesis’ bankruptcy going forward, also ensures that Genesis’ loan book will be winded down, and the same goes for the sale of bankrupt entities. Furthermore, the in-principle agreement also discusses refinancing outstanding loans.
The instance of the same is Digital Currency Group borrowing $600 million in cash and Bitcoin from Genesis. This also included the equitization of the 10-year promissory note worth $1.1 billion. This note was given by DCG to Genesis in return for the claims from failed hedge fund, 3AC.
How this could impact the crypto market going forward is yet to be seen since Genesis’ ups and downs in the past have not proved to be major movers.
Crypto market maintains a strong heading
The total cryptocurrency market capitalization recovered its November 2022 losses worth $250 billion last month. In doing so, it also managed to breach the $1 trillion mark and keep the total value of all cryptocurrencies above the psychological level.
Total crypto market capitalization
However, the changing market is now creating an atmosphere of worry among investors as the total market cap has declined to $1.005 trillion after losing nearly $35 billion in five days. The crypto market cap staying above $1 trillion is important for the market to sustain its recovery, as a fall below it may trigger panic among traders.
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