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Per a report from CoinDesk, crypto lending firm Genesis and its parent company Digital Currency Group (DCG) are moving forward with the former’s bankruptcy process. The undertakings have reached an "agreement in principle" for restructuring the loan undertaking.
The report cites an individual familiar with the allegation that DCG and Genesis persuaded a group of creditors. Under the original agreement, Genesis will be required to "liquidate" its loan portfolio and sell some of its subsidiaries.
DCG Blueprints for Crypto Lender Genesis.
In addition, the agreement in principle will oblige DCG to "refinance" its USD 500 million cash loan and its USD 100 million in Bitcoin from its subsidiary, according to the report. The source failed to provide further details on the deal but mentioned that the refinancing process would include the following:
(…) an equitization of the infamous 10-year promissory note that DCG gave Genesis in return for failed hedge fund 3AC (Three Arrows Capital) claims.
DCG and Genesis entered into this agreement with a group of individual and corporate creditors with claims of over $2 billion against the crypto loan company. Now, the entities will propose a similar agreement to other creditors, including users who have subscribed to Gemini crypto exchange Gemini's Gemini Earn program.
What it might mean for Gemini to gain users.
Crypto lending firm Genesis filed for bankruptcy on January 20th following several critical events. First, the collapse of 3AC CEO Predicts How The Crypto War Between DCG And Genesis Will End. Genesis was involved with both organizations.
For the first, the dcg issued a promissory note, as mentioned by the Coindesk source, in order to maintain the positive Genesis balance sheet and continue its activities. However, the ftx crash was too much pressure, and the company was forced to stop operations.
Against this backdrop, users of the Gemini earnings program have been deprived of their funds. The crypto swap and its founders, cameron and tyler winklevoss, were in talks with dcg and barry silbert to make their users whole.
The entities have not been able to enter into an agreement and at this stage it is not clear whether they will accept the original transaction and proceed. It is worth noting that Cameron Winklevoss celebrated Genesis’ bankruptcy filing as a “crucial step towards us being able to recover your assets.”
3/ The good news is that, by seeking the protection of the bankruptcy court, Genesis will be subject to judicial oversight and be required to provide discovery into the machinations that brought us to this point.
— Cameron Winklevoss (@cameron) January 20, 2023
If Gemini agrees, DCG and Silbert could avoid further legal action. In addition, Gemini Earn users may have a better chance to get their money back.
