Key points to remember
- Genesis’ parent company, Digital Currency Group (DCG), failed to repay the $650 million debt to Gemini.
- Today, May 22, Gemini will file a Gemini Master claim in an attempt to return over $1 billion in digital assets to its Earn users.
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The Digital Currency Group (DCG), a leading crypto conglomerate and parent company of Genesis’ lending division, finds itself embroiled in bankruptcy proceedings between Gemini and Genesis. In recent weeks, many have feared that the company will repay the bankruptcy estate from the week of May. 9.
This fear was confirmed in a Gemini Transparency Report when Gemini, a crypto exchange and creditor of Genesis, announced on Friday that DCG failed to make a $630 million payment due the week of May 9:
“In the event an agreement cannot be reached, Gemini (along with the other parties) is working with Genesis to suggest the terms of a modified reorganization plan that could be advanced without DCG’s consensual participation.”
Earlier in May, Genesis creditors agreed to a 30-day mediation period and a court-appointed mediator after a fraction of creditors distanced themselves from a February reorganization plan. The update read, “Gemini will begin a 30-day process to negotiate ‘the contribution to be made by DCG and its affiliates’ to Genesis’ bankruptcy.”
1/ Win Updates: Last week, Genesis, Digital Currency Group (DCG), Unsecured Creditors’ Committee (UCC), Creditors’ Committee and Gemini agreed to begin a 30-day mediation process to reach a final resolution as soon as possible. possible.
— Gemini (@Gemini) April 30, 2023
Gemini plans to file a lawsuit against Genesis, stating in the update:
“Gemini has prepared the Gemini Master Claim, which is due Monday (5/22). The Gemini Master Claims seeks the return of over $1.1 billion in digital assets that Genesis has refused to return to the 232,000 Earn users who had active loans as of January 19, 2023.”
Genesis, Gemini and groups representing creditors such as the Unsecured Creditors Committee (UCC) are currently discussing whether to grant the DCG forbearance, providing the company with a way around a default. According to Gemini, part of that decision hinges on whether the parties have confidence in the DCG’s willingness to sincerely engage in negotiations toward a consensual resolution.
A collaboration between Gemini and Genesis on the proposed terms of a new plan will be expected if mediation cannot be achieved, as “the terms of an amended plan of reorganization (…) could be advanced without the consensual participation of DCG”.