Digital Currency Group (DCG) and its subsidiary Genesis have reached an agreement with a key group of creditors on the restructuring of its crypto trading business and lending arm, which filed for bankruptcy protection last month. Genesis Global Trading will be brought into Genesis Global Holdco on the Effective Date, with both entities being marketed and sold as a package to maximize estate recoveries.
Debt owed by DCG to Genesis Holdco will also be restructured under the new terms, with DCG issuing a second lien term loan facility maturing in June 2024. The loan will consist of two tranches, one being denominated in US dollars and paying 11.5% interest and the other in bitcoin, paying 5% interest.
DCG has also agreed to issue a class of convertible preferred stock, the details of which are still being worked out. The company will exchange its existing $1.1 billion promissory note, which is currently due in 2032, for this convertible stock.
Meanwhile, Gemini Trust Co. co-founder Cameron Winklevoss announced that the company would pay “up to an additional $100 million for Earn users under the plan.” Gemini had partnered with Genesis to offer the Earn yield product until Nov. 16, when Genesis announced it was halting lending activities and affecting Gemini Earn customers’ access to their funds.
The tentative agreement was reached with two ad hoc creditor groups, including Gemini Trust Co. and DCG. The restructuring and sale of Genesis’ crypto trading business and lending arm should help the company maximize recoveries and provide stability for its customers and partners.
The finer details of the deal are still being worked out, but the restructuring should provide a much-needed boost to the crypto lending industry, which has faced challenges due to the volatility of the market. crypto market.