The failure of Genesis would pay the landowner $ 350 million to the financier Todd Boehly

The cryptoconglomerate Digital Currency Group tries to create capital and to avoid the bankruptcy of his brokerage daughter Genesis, partly to avert the immediate repayment of a loan to the investment house of the US financier.

Boehly, who recently bought the Chelsea Football Club, led to his investment group Eldridge in November last year, which consisted of a $ 600 million loan from Eldridge and a group of other investors.

Genesis has already exposed the withdrawals in his loan unit, which made it possible to borrow their digital tokens for high yields, and the Moelis investment bank commissioned to examine their options after the failure of the FTX crypto tour had triggered shock waves in the entire industry last month.

Now people with direct knowledge of the finances of DCG said that if this 100 % subsidiary fails, the outstanding $ 350 million would immediately be due from this loan. The Senior Secured Term Loan has a higher rank than other debts and has certain preferred rights, which means that it has to be paid back first, one of the people said.

The cascading demands for cash illustrate how the imposion of FTX continues to threaten the broader crypto industry, in which a few large actors such as DCG play a central role in a market that pretends to be decentralized.

DCG is one of the largest and earliest investors in the industry in crypto projects and coins. The group, founded by the billionaire Barry Silbert in 2015, has assets such as Genesis and the investment manager Grayscale. The companies are associated with a network of internal credit and investments, as the FT previously unveiled.

Silbert informed the investors that $ 350 million of the Eldridge loan were letted after Genesis restricted its operation last month. DCG has debt of $ 1.6 billion compared to Genesis, but his loan from Eldridge-which was granted together with investors such as the Californian asset manager Capital Group, the private equity company Francisco Partners and the investment manager Davidson Kempner Capital Management. Last month said Genesis that "no plans to register immediately".

DCG said that his relationship with Eldridge "is completely independent of the Restructuring strategy of Genesis and has no influence on any result in Genesis". Genesis is completely owned by DCG. Eldridge refused to comment.

The participation of Boehly in DCG is one of several investments by the US billionaire in digital assets. In March, Eldridge invested in the FinTech and crypto infrastructure company Cross River and supported the crypto exchange and wallet provider Blockchain.com last year.

Eldridge believes that the suspension of the payments of Genesis means that it cannot repay its debts and therefore in default of payment, said people who were familiar with the matter. However, these people added that Eldridge was careful to avoid the loss of his investment, and work with DCG to support it, to obtain capital and to pay the investors, customers and customers of Genesis.

This includes customers of the Gemini crypto exchange of the Winklevoss twins, which are owed $ 900 million, and the Dutch Stock Exchange Bitvavo, which is due to 280 million euros. Bitvavo said on Friday that it was able to pre-finance all blocked assets at DCG and its subsidiaries, and that its customers are "not exposed to DCG liquidity problems".

The creditors have formed a committee to regain their funds.

DCG was rated 10 billion USD last year and is supported by investors, including Softbank, Ribbit Capital and CapitalG, the Alphabet venture arm.

Since the outbreak of the cryptocrisy, the company has been hurrying to procure capital and is looking for cash before it may have to sell one of its portfolio companies, the people said.

Before the collapse of crypto confidence this November, investors had reduced their stocks into the debt title of DCG, according to securities documents. In September, the Capital Group reduced an inventory of DCG debt of $ 1.26 million by 17 percent.

DCG owes Genesis loans worth $ 575 million that would be due in May 2023, money that was used to finance investments in another of his subsidiaries, the asset manager Grayscale, as well as for stock returns. It also has a 2032-due note of $ 1.1 billion, which was created when DCG took over the liabilities of Genesis after the collapse of the Digital-ASSET HEDGREGEGAGE DREE Arrows Capital in summer.