1 year ago
Haseeb Qureshi, the Managing Partner astatine Dragonfly Capital, discussed the imaginable consequences of Genesis going into liquidation connected a caller occurrence of Unchained’s “The Chopping Block.”
1/ On a caller occurrence of Unchained's The Chopping Block, @hosseeb makes a astonishing remark astir the $1.1 cardinal DCG-Genesis promissory note.
He says the 10 twelvemonth enactment whitethorn person been structured arsenic "callable" successful the lawsuit of a Genesis liquidation.
Here's what that would mean:
— Ryan Selkis 
(@twobitidiot) December 11, 2022
Discussed connected the Dec. 3 occurrence of Unchained’s ‘The Chopping Block,’ Qureshi said:
“It looks similar determination was a batch of comic engaged successful the accounting astatine genesis precise very precocious level”
According to Qureshi, the Digital Currency Group’s (DCG) $1.1 cardinal promissory enactment to Genesis could beryllium “callable” successful the lawsuit of liquidation, requiring DCG to wage the full worth of the enactment immediately.
Qureshi besides discussed DCG’s buy-out of Genesis’s “bad debt” successful Three Arrows Capital (3AC), reported to beryllium astir $2.1 billion.
However, Qureshi noted that:
“DCG does not person $2.1B successful currency to wage the worth of the promissory note”
3/ It would besides bash 2 different things:
+ importantly trim DCG's quality to bounds liability from a Genesis bankruptcy. a callable promissory enactment would fundamentally beryllium a "you interruption it, you bargain it" situation
+ trim Genesis's urgency to record bankruptcy arsenic they "have the assets"
— Ryan Selkis (@twobitidiot) December 11, 2022
Qureshi discussed 2 imaginable scenarios successful the lawsuit of Genesis going into liquidation.
The archetypal scenario is that “Genesis files [for bankruptcy] and past pulls DCG into bankruptcy,” entering a analyzable bankruptcy procedure.
The 2nd script is that “Genesis goes under, and past the enactment is itself auctioned disconnected astatine a worth little than par,” but somehow, DCG is prevented from going under.
Qureshi concluded by explaining that “it looks very, precise likely” that genesis volition person to record for bankruptcy oregon spell done a restructuring wherever creditors would person to hold to trim claims astatine Genesis to debar bankruptcy.
“The bankruptcy would beryllium truthful deleterious to creditors to Genesis”
Robert Leshner, laminitis of Compound and creditor to Genesis, discussed Genesis being pushed into bankruptcy involuntarily.
Leshner highlighted the imaginable consequences and implications of specified a script and elaborate his expectations of Genesis filing for bankruptcy:
“Any fig of creditors could propulsion them into bankruptcy […] I deliberation the likelihood are high, similar 80 percent”
The station Genesis liquidation could unit DCG bankruptcy – The Chopping Block reports appeared archetypal connected CryptoSlate.
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