Digital currency Group (DCG) has defaulted on a $630 Million debt payment, reports by the US-based cryptocurrency exchange Gemini.
In a new blog post update, Geminisaysthey are working with DCG-owned cryptocurrency lender Genesis to find a resolution for Gemini Earn users to redeem their assets.
Gemini and Genesis are in mediation to find a resolution for Gemini Earn users who lost their assets when Genesis went bankrupt in January.
Earlier these 30 days, DCG, Gemini, and Genesisenteredinto a 30-day mediation process to find a resolution for Gemini Earn users who lost their assets when the broker went under.
Court filings indicate that Genesisowesmore than $3.8 Billion to its largest 50 creditors, including Gemini.
Reports by new Gemini update, Gemini has been working on 3 points regarding the Earn program recently, the 1st of which being DCG’s apparent default.
“First, Digital currency Group, Inc. (DCG), the parent company of Genesis Worldwide Financial resources, LLC (Genesis) did not pay the approximately $630 Million that came due past week. Genesis, the Unsecured Creditors Committee (UCC), the Ad Hoc Group of Creditors (AHG), and Gemini are seeing as whether to provide a forbearance to DCG to avoid a DCG default. Consideration will be based in part on whether the parties believe DCG will engage in good faith negotiations on a consensual deal.
Second, 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. To that end, on Friday (5/19), Genesis filed a motion with the Bankruptcy Court seeking to extend its period of exclusivity to propose such a strategy. This would be a strategy that would have Gemini’s input if not outright support.
Third, 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 and the exchange had collaborated to create Gemini’s Earn program, which allowed retail investors to loan out their digital assets to earn interest. Genesis owes about $765 Million to members of the Earn program, the highest single amount it owes, reports by the bankruptcy filings.
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