Haseeb Qureshi highlights the possible consequences of the Genesis liquidation. This is what it would mean for DCG.
Haseeb Qureshi, a partner at Dragonfly Capital, expounded on a show that Genesis creditors may require DCG to redeem $1.1 billion worth of Genesis notes. Which will cause DCG’s liquidity to run out and lead to its bankruptcy.
“Seems like there was a lot of fun busy accounting at very, very high-end Genesis .”
Specifically, Haseeb Qureshi, discussed the potential fallout from Genesis’ liquidation on the recent episode of Unchained’s “The Chopping Block.”
Consequences for DCG according to Haseeb Qureshi
Indeed, according to Haseeb Qureshi, Digital Currency Group’s (DCG)’s $1.1 billion promissory note to Genesis could be “recoverable” in the event of liquidation. Which requires DCG to pay the full value of the note immediately.
In fact, Haseeb 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, he noted that DCG does not have the $2.1 billion in cash to pay off the value of the note.
1/ On a recent episode of Unchained's The Chopping Block, @hosseeb makes a surprising comment about the $1.1 billion DCG-Genesis promissory note.
— Ryan Selkis 🥷 (@twobitidiot) December 11, 2022
He says the 10 year note may have been structured as "callable" in the event of a Genesis liquidation.
Here's what that would mean:
Possible contexts for Genesis
” A callable note would basically be a tear it, buy it situation .”
By the way, Haseeb Qureshi indicated two possible scenarios in case Genesis goes into liquidation :
- Genesis files for bankruptcy and later drives DCG out of business. Entering into a complex bankruptcy proceeding.
- Genesis goes under, and then the note is auctioned off at less than par. But somehow, DCG is kept from going under.
1/ On a recent episode of Unchained's The Chopping Block, @hosseeb makes a surprising comment about the $1.1 billion DCG-Genesis promissory note.
— Ryan Selkis 🥷 (@twobitidiot) December 11, 2022
He says the 10 year note may have been structured as "callable" in the event of a Genesis liquidation.
Here's what that would mean:
Now, Haseeb Qureshi ended by explaining that it ” seems very, very likely ” that Genesis will have to file for bankruptcy. Or go through a restructuring in which creditors would have to agree to lower the demands on Genesis to avoid collapse.
” Bankruptcy would be just as damaging to Genesis’s creditors .”
Finally, could the extended silence from Genesis’s creditors mean that it is giving DCG and Genesis time to resolve the issue? Leave your opinion in the comment box.
I close with this phrase by Francisco De Quevedo:
“No loser has justice if he is to be judged by his victor.”
