DCG Sues Genesis for $1.1B Over 3AC-Related Promissory Note Dispute

Digital Currency Group has escalated its legal battle with bankrupt subsidiary Genesis Global Capital, filing a claim for over $100 million in alleged overpayments tied to a $1.1 billion promissory note. The safeguard instrument, created during 2022's crypto contagion, was meant to insulate Genesis from Three Arrows Capital's collapse.

Court documents reveal DCG's accusation that Genesis improperly profited from 3AC's collateral while claiming protection under the note. The lawsuit adds another LAYER to the complex restructuring of Genesis, which entered Chapter 11 last year amid the crypto lending sector's unraveling.

Legal observers note the unusual dynamic of a parent company pursuing claims against its own subsidiary during bankruptcy proceedings. The dispute centers on interpretation of the promissory note's terms, with DCG asserting Genesis obtained windfall gains while shielded from 3AC's fallout.