Genesis and Digital Currency Group Propose Compensation Plan for Retail Creditors
Genesis and its parent company, the Digital Currency Group (DCG), have put forward a compensation plan for over 230,000 retail creditors. The proposal aims to provide relief to users of Gemini’s Earn Program and could result in creditors recovering between 95-110% of their claims. This plan will be voted on later this year.
Potential Full Recovery for Genesis Earn Users
Genesis supported the Earn program, which was available to customers of the Gemini crypto exchange. However, when Genesis had to halt withdrawals and file for bankruptcy protection, it became problematic. Initially, potential recoveries were estimated at up to 90% of unsecured creditors’ holdings. But the recent filing suggests a more positive outcome.
In an interview, an anonymous senior DCG official stated that Earn customers could potentially recover between $440 million and $765 million from their claims. Additionally, they would acquire over $600 million in collateral from Gemini. This amounts to a full restitution for current customers under the given circumstances.
Compensation Plan Set for End-Year Approval
A draft agreement from August 29 reveals that some repayments may be made in cryptocurrency instead of US dollars. DCG plans to present a revised version of the proposed plan by October 6 and expects voting results by December 5. Timely distribution will follow.
The bankruptcy filing by Genesis’ lending arm earlier this year was due to the collapse of Three Arrows Capital and issues at FTX exchange. Negotiations regarding DCG’s financial contribution caused delays in resolving the situation.
During this time, there was a public dispute between Gemini exchange owners Cameron and Tyler Winklevoss and DCG founder Barry Silbert. The recent filing also accuses Gemini of failing to assist their customers during the bankruptcy proceedings.
Hot Take: Genesis and DCG Propose Compensation Plan for Retail Creditors
Genesis and its parent company, the Digital Currency Group (DCG), have offered a compensation plan that could potentially result in full recovery for retail creditors affected by the bankruptcy of Genesis’ lending arm. The plan aims to provide relief to users of Gemini’s Earn Program, offering them between 95-110% of their claims. If approved, this would be a significant step towards resolving the issues faced by these creditors and restoring their trust in the cryptocurrency industry.
By
By
By
