Haseeb Qureshi, the Managing Partner at Dragonfly Capital, discussed the potential consequences of Genesis going into liquidation on a recent episode of Unchained’s “The Chopping Block.”

According to Qureshi, the Digital Currency Group’s (DCG) $1.1 billion promissory note to Genesis could be “callable” in the event of liquidation, requiring DCG to pay the total value of the note immediately.

Qureshi also discussed DCG’s buy-out of Genesis’s “bad debt” in Three Arrows Capital (3AC), reported to be around $2.1 billion. Qureshi discussed two potential scenarios in the event of Genesis going into liquidation.

The first scenario is that “Genesis files [for bankruptcy] and then pulls DCG into bankruptcy,” entering a complex bankruptcy procedure. The second scenario is that “Genesis goes under, and then the note is itself auctioned off at a value less than par,” but somehow, DCG is prevented from going under.

Qureshi concluded by explaining that “it looks very, very likely” that genesis will have to file for bankruptcy or go through a restructuring where creditors would have to agree to reduce claims at Genesis to avoid bankruptcy.