The Digital Currency Group (DCG) has been facing financial turmoil for several months now. Most of the time, his financial problems are due to the liquidity crisis that one of his companies, Genesis, is facing.
Internal and external disputes
Although the DCG Group’s financial troubles mostly come down to the predicament Genesis finds itself in, some creditors – Gemini’s chief among them – believe the main culprit is DCG Group CEO Barry Silbert.
According to the Winklevoss twins, DCG currently owes Gemini north of $1.6 billion, an issue that has trickled down to exchange users due to Gemini’s Earn partnership with Genesis.
Silbert had previously refuted the claim, saying DCG had honored all overdue payments, with the loan due next in May.
“DCG has not borrowed $1.675 billion from Genesis. DCG has never missed an interest payment to Genesis and is current on all outstanding loans; the next loan due date is May 2023. DCG has postponed to Genesis and your advisors a proposal on December 29 and received no response.
However, the maturity of the loan has now been reached. According to Gemini, no payment was made to Genesis.
Creditors looking for a solution
As of the end of last week, Genesis’s approximately $630 million loan to DCG was not repaid. In order to avoid a default – which could send DCG into bankruptcy – Gemini, Genesis and DCG’s creditors’ committee are considering loan forbearance to prevent the problem from getting out of control.
Any agreement with DCG would depend entirely on the debtor’s intention to engage in good faith, according to the statement released by Gemini.
If a deal is impossible to reach, Genesis will argue for a modified reorganization plan that would give it a greater chance of repaying its creditors. Gemini would be consulted on any proposal, although their approval is not guaranteed.
In the meantime, Gemini will file the Gemini Master Claim, formally requesting the immediate return of $1.1 billion in digital assets belonging to its users that Genesis had custody of under the Earn partnership between the two companies.
This claim would be a separate proceeding from the case against DCG and its CEO, in particular, whom the Winklevoss twins have repeatedly accused of wrongdoing.
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