DCG Sues Genesis for $105M Over 3AC Promissory Note Dispute

Digital Currency Group (DCG) has filed a legal demand for $105 million in repayment from Genesis Global Capital, citing a 2022 promissory note issued in the aftermath of the collapse of Three Arrows Capital (3AC) [1]. The demand is part of a broader $1.1 billion claim related to the note, which DCG argues remains valid despite Genesis’s subsequent recovery of nearly $2.8 billion from $2.36 billion in outstanding loans tied to 3AC [2]. DCG’s CEO, Barry Silbert, has noted that this unexpected asset recovery has turned a potential loss into a financial gain for Genesis, challenging the necessity of honoring the promissory note [3].

Genesis, however, contests the claim, asserting that the asset recoveries—particularly from Grayscale Bitcoin Trust shares—have effectively offset its debt obligations. The legal dispute now centers on the valuation of these recovered assets and whether they should be considered in fulfilling the terms of the promissory note [2]. This disagreement highlights the complexities of intercompany debt structures within the crypto industry, especially in the context of bankruptcy and asset recovery.

The litigation is seen as a significant development in shaping legal precedents for handling debt obligations and creditor arrangements in the cryptocurrency sector [1]. While the dispute remains unresolved, it has not triggered major market volatility or liquidity shifts, with creditors and market participants expressing confidence in the eventual resolution of the matter [3]. The case also raises questions about the broader implications of asset recovery in crypto bankruptcies, as it may influence future legal and financial strategies among market players.

Industry observers suggest that the outcome could provide a framework for managing similar disputes, particularly in light of the ongoing restructuring efforts seen with other major crypto firms such as Celsius and Voyager [2]. However, no immediate regulatory changes or asset redistribution patterns have emerged from the litigation thus far. The legal battle is expected to continue, with both parties likely to present further arguments in court.

Source:

[1] DCG Demands $105M From Genesis After 3AC Collapse – [https://coindoo.com/dcg-demands-105m-from-genesis-after-3ac-collapse/](https://coindoo.com/dcg-demands-105m-from-genesis-after-3ac-collapse/)

[2] DCG Sues Genesis Over $105M Promissory Note Amid ... – [https://www.ainvest.com/news/dcg-sues-genesis-105m-promissory-note-2-8b-asset-recovery-2508/](https://www.ainvest.com/news/dcg-sues-genesis-105m-promissory-note-2-8b-asset-recovery-2508/)

[3] Digital Currency Group Sues Genesis Over Promissory Note – [https://www.outlookmoney.com/cryptocurrency/cryptocurrency/digital-currency-group-sues-genesis-over-promissory-note](https://www.outlookmoney.com/cryptocurrency/cryptocurrency/digital-currency-group-sues-genesis-over-promissory-note)