Digital Currency Group, the parent company of bankrupt crypto lender Genesis, has been barred from reducing ownership in the bankrupt firm until its bankruptcy proceedings conclude, according to a Dec. 18 court filing.
Judge Sean Lane ruled that DCG’s ownership of the distressed crypto lender was crucial for securing tax benefits. These benefits hinge on Genesis maintaining its association with DCG, ensuring it remains part of a tax-consolidated group outlined in Section 1502 of the Tax Code and related regulations.
According to the filing:
“DCG is barred from (i) taking any actions that would reasonably be expected to cause DCG and Holdco to no longer be part of the tax consolidated group of which DCG is the common parent (or any continuation of such group) as provided under Section 1502 of the Tax Code and regulations promulgated thereunder, (ii) taking any actions that would reasonably be expected to cause Holdco to undergo an “ownership change” within the meaning of section
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