Digital Currency Group (DCG), led by Barry Silbert, recently announced the full repayment of the loan to its Genesis subsidiary. However, a post on X by cryptocurrency veteran Vijay Boyapati offers a different narrative. The author of “The Bullish Case for Bitcoin” alleged a pattern of deception by DCG and Silbert.
Boyapati Circled Back to Genesis' bankruptcy in June 2022, When CEO Michael Morrow, along with DCG and Silbert, financed Genesis to hide losses.
He claims that DCG supposedly accomplished this through a “promissory note,” which Genesis treated as a current asset, despite the decade-long redemption period and below-market interest rate.
Cryptocurrency Vet Demands GBTC Settlement
The subject also claims that during this period, DCG withdrew a large loan of 18,697 BTC from Genesis, knowing that the latter was insolvent. Boyapati points out that it is this specific loan that DCG and Silbert recently claimed to have repaid.
Boyapati claims that during the FTX collapse in November 2022, DCG allegedly repaid a portion of its Bitcoin loan to Genesis. However, he claims that the amount was not paid in BTC but in discounted GBTC shares. He hints at Genesis' partial acceptance of payment despite creditors' demands for Bitcoin.
“There was no easy way for Genesis to sell GBTC and convert it to BTC because GBTC was a product of its sister company, Grayscale, and regulations prohibit selling more than a small percentage of the total fund per quarter to related companies,” Boyapati added.
Creditors are reportedly arriving in court
Amid these allegations, reports emerged that an ad hoc group of lenders accused DCG of failing to meet its repayment obligations to Genesis Global. According to reports in Monday's court filing, DCG still owes significant amounts in US dollars and Bitcoin.
DCG announced on Friday that it has settled $1 billion in debt, including $700 million for Genesis, amid… Bankruptcy procedures.
