Barry Silbert's DCG Can't Meddle With Genesis Ownership Until Chapter 11 Finalizes: Court

Genesis won a bid to block its parent company, the Barry Silbert-led Digital Currency Group (DCG), from selling or reducing ownership in the company.

What Happened: Until Genesis closes its Chapter 11 proceedings, it can receive certain tax benefits which will be applicable only if the company remains part of the larger tax-consolidated group under the DCG banner.

If DCG’s ownership of the lender stands below 80%, Genesis will lose benefits on almost $700 million worth of “federal net operating loss carryforwards.”

These carryforwards can be used to reduce Genesis’ current federal income tax liability and future liabilities. This will assist in future tax savings strengthening debtors’ cash position and benefiting the interests of all the parties.

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Background: Singapore-based Three Arrows Capital liquidated in June 2022 after it faced $3.5 billion in creditor claims. Marking it as one of the largest hedge-fund trading losses, 3AC eroded more than $3 billion over 2021 and 2022.

DCG, the parent company of Genesis Global Trading, is the biggest creditor of Three Arrows Capital. Genesis Asia Pacific lent Three Arrows $2.4 billion.

In its most recent update, Genesis agreed to pay $33 million to 3AC for settling the hedge fund’s $1 billion in claims.

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