Haseeb Qureshi, Managing Partner at Dragonfly Capital, discussed the potential consequences of the Genesis liquidation on a recent episode of Unchained’s “The Chopping Block.”

Speaking on the December 3 episode of Unchained’s ‘The Chopping Block’, Qureshi said:

“Looks like there was a lot of fun busy accounting in very, very high-level genesis”

According to Qureshi, Digital Currency Group (DCG)’s $1.1 billion note to Genesis could be “recoverable” in the event of liquidation, requiring DCG to pay the full value of the note immediately.

Qureshi also discussed DCG’s purchase of Genesis’ “bad debt” at Three Arrows Capital (3AC), which was reported to be around $2.1 billion.

However, Qureshi noted that:

“DCG does not have $2.1B in cash to pay the value of the note”

Qureshi discussed two possible scenarios in case Genesis goes into liquidation.

The first scenario is that “the Genesis files [for bankruptcy] and then bankrupts DCG,” entering complex bankruptcy proceedings.

The second scenario is that “Genesis goes under, and then the note is auctioned off at less than par”, but somehow, DCG is prevented from going under.

Qureshi concluded by explaining that it “seems very, very likely” that Genesis will either have to file for bankruptcy or go through a restructuring in which creditors would have to agree to reduce claims on Genesis to avoid bankruptcy.

“Bankruptcy would be so detrimental to Genesis creditors”

Robert Leshner, founder of Compound and a Genesis creditor, said Genesis was inadvertently pushed into bankruptcy.

Leshner highlighted the potential consequences and implications of such a scenario and detailed his expectations that Genesis would file for bankruptcy:

“Any number of creditors could bankrupt them […] I think the odds are high, like 80 percent.”

Posted in: Bankruptcy, Investments

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This post Genesis liquidation could force DCG bankruptcy

was published first on https://cryptoslate.com/genesis-liquidation-could-force-dcg-bankruptcy-the-chopping-block-reports/


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