Key Takeaways
- Genesisโs parent company Digitalย currency Group (DCG) failed to make the $650 Million in debt repayment to Gemini.
- Today, May 22, Gemini will file a Gemini Master Assertย to look to return over $1 Billion in digital assets for its Earn Users.
The Digitalย currency Group (DCG), a leading cryptocurrency conglomerate and parent company of Genesisโ lending division, finds itself entangled in the bankruptcy proceedings betwixt Gemini and Genesis. The last few weeks had numerous fearing that the company canย potentially default on a repayment to the bankruptcy estate initiateย the week of May 9.
This fear was confirmed in a Gemini transparency report when Gemini, a cryptocurrency exchange and Genesis creditor, postedย on Friday that DCG failed to causeย a $630 Million payment due the week of May 9:
โIn the event a deal cannot be reached, Gemini (along with the other parties) is working with Genesis to suggest terms for an amended strategy of reorganization that mayย be advanced without DCGโs consensual participation.โ
Earlier in May, Genesisโs creditors agreed to a 30-day mediation period and a court-appointed mediator after a fraction of the creditors distanced themselves from a February reorganization strategy. The update read, โGemini toย start a 30-day process to mediate โthe contribution to be provided by DCG and its affiliatesโ to the Genesis bankruptcy.โย
1/ Earn update: This lastย week, Genesis, Digitalย currency Group (DCG), the Unsecured Creditors Committee (UCC), the Creditor Committee, and Gemini agreed toย begin a 30-day mediation process to drive to a final resolution as soon as possible.
โ Gemini (@Gemini) April 30, 2023
Gemini is planning to file a claim against Genesis, stating in the update:ย
โGemini has been preparing the Gemini Master Claim, which must be filed on Monday (5/22). The Gemini Master States seeks the return of over $1.1 Billion of digital assets that Genesis has refused to return to the 232,000 Earn users who had active loans as of January 19, 2023.โ
Genesis, Gemini and groups representing creditors such as the Unsecured Creditor Committee (UCC) are asย ofย now discussing whether to provides DCG forbearance, thus supplying an avenue for the company to circumvent a default. Reportsย by Gemini, part of this decision is contingent upon the partiesโ confidence in DCGโs willingness toย participate sincerely in negotiations toward a consensual resolution.
A collaboration betwixt Gemini and Genesis on the proposed terms of a new strategy will be planned if mediation cannot be reached, as โterms for an amended strategy of reorganization [โฆ] mayย be advanced without DCGโs consensual participation.โ
