- Genesis’s parent company Digital currency Group (DCG) failed to make the $650 Million in debt repayment to Gemini.
- Today, May 22, Gemini will file a Gemini Master Assert to look to return over $1 Billion in digital assets for its Earn Users.
The Digital currency Group (DCG), a leading cryptocurrency conglomerate and parent company of Genesis’ lending division, finds itself entangled in the bankruptcy proceedings betwixt Gemini and Genesis. The last few weeks had numerous fearing that the company can potentially default on a repayment to the bankruptcy estate initiate the week of May 9.
This fear was confirmed in a Gemini transparency report when Gemini, a cryptocurrency exchange and Genesis creditor, posted on Friday that DCG failed to cause a $630 Million payment due the week of May 9:
“In 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 may be advanced without DCG’s consensual participation.”
Earlier in May, Genesis’s 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, “Gemini to start a 30-day process to mediate ‘the contribution to be provided by DCG and its affiliates’ to the Genesis bankruptcy.”
1/ Earn update: This last week, Genesis, Digital currency Group (DCG), the Unsecured Creditors Committee (UCC), the Creditor Committee, and Gemini agreed to begin a 30-day mediation process to drive to a final resolution as soon as possible.
— Gemini (@Gemini) April 30, 2023
Gemini is planning to file a claim against Genesis, stating in the update:
“Gemini 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.”
Genesis, Gemini and groups representing creditors such as the Unsecured Creditor Committee (UCC) are as of now discussing whether to provides DCG forbearance, thus supplying an avenue for the company to circumvent a default. Reports by Gemini, part of this decision is contingent upon the parties’ confidence in DCG’s willingness to 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 “terms for an amended strategy of reorganization […] may be advanced without DCG’s consensual participation.”