Key Takeaways
- Genesis’ parent company Digital Currency Group (DCG) failed to make a $650 million loan payment to Gemini.
- This May 22, Gemini will file a Gemini Master Claim to seek the return of over $1 billion in digital assets for its Earn Users.
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Digital Currency Group (DCG), a leading crypto conglomerate and parent company of Genesis’ lending division, has found itself embroiled in bankruptcy proceedings between Gemini and Genesis. The last few weeks have many fearing that the company may fail to pay the bankruptcy status starting from the week of May 9.
This fear confirmed in a Gemini transparency report when Gemini, a crypto exchange and Genesis creditor, announced on Friday that DCG failed to make a $630 million payment due the week of May 9:
“If an agreement cannot be reached, Gemini (along with other parties) will work with Genesis to propose terms for a revised reorganization plan that can be pursued without the involvement of DCG.”
Earlier in May, Genesis creditors agreed to a 30-day mediation period and a court-appointed mediator after a group of creditors distanced themselves from a bankruptcy plan. reorganized in February. The update read, “Gemini will begin a 30-day mediation process on the ‘contribution to be made by DCG and its affiliates’ in the bankruptcy of Genesis.”
1/ Earn update: This past 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 bring a final resolution as soon as possible.
– Gemini (@Gemini) April 30, 2023
Gemini plans to file a claim against Genesis, saying in the update:
“Gemini is preparing the Gemini Master Claim, which must be filed this Monday (5/22). Gemini Master Claims seeks to return more than $1.1 billion in digital assets that Genesis refused to return to 232,000 Earn users with active loans as of January 19, 2023.
Genesis, Gemini and groups representing creditors such as the Unsecured Creditor Committee (UCC) are now discussing whether to grant DCG forbearance, thus providing a way for the company to avoid a default. According to Gemini, part of this decision depends on the parties’ confidence in DCG’s willingness to sincerely engage in negotiations leading to a consensual resolution.
A collaboration between Gemini and Genesis in the proposed terms of a new plan will be planned if mediation cannot be reached, as “terms for a revised reorganization plan. […] can be advanced without the consensual participation of the DCG.”
