Digital Currency Group Sues Genesis Global Capital Over $1.1 Billion Promissory Note

Digital Currency Group (DCG) has filed a lawsuit against its subsidiary Genesis Global Capital in the U.S. Bankruptcy Court for the Southern District of New York. The dispute centers on a $1.1 billion promissory note issued after the collapse of crypto hedge fund Three Arrows Capital (TAC) in 2022, which DCG claims was an attempt to address a financial shortfall caused by TAC's default on a $2.36 billion margin call.

DCG alleges that Genesis recorded substantial gains from TAC collateral as crypto prices rebounded, effectively reducing the principal amount of the note. The filing asserts these recoveries far exceeded the initial $1.1 billion, yet Genesis has failed to adjust the obligation accordingly. DCG now seeks repayment of over $105 million plus interest.

The legal action marks another chapter in the contentious relationship between DCG and Genesis. Earlier this year, Genesis's Litigation Oversight Committee criticized DCG leadership, including CEO Barry Silbert, signaling deepening tensions within the crypto conglomerate.