- Genesis filed for Chapter 11 bankruptcy protection in January 2023.
- Gemini claims that Genesis owes them around $1 billion in client money.
According to a court filing made on August 29th, the Digital Currency Group (DCG) and insolvent cryptocurrency lender Genesis have reached an in-principle agreement to settle the claims of the creditors.
With a severe liquidity problem ensued with the demise of cryptocurrency exchange FTX. Genesis filed for Chapter 11 bankruptcy protection in January 2023. According to DCG, the parent company of Genesis, the insolvent cryptocurrency lender has $630 million in unsecured debts due in May 2023. It also owns an unsecured promissory note for $1.1 billion that is due in 2032.
Relief for Creditors
The DCG plans to enter into additional financing facilities and a repayment arrangement as per the terms of the in-principle contract reached. There will be a first-lien facility of $328.8M with a maturity of 2 years. There will also be a second-lien facility for $830M that has a maturity of 7 years.
According to the statement, DCG intends to pay its creditors $275 million over the course of four instalments. According to the filing, if the proposal is implemented, unsecured creditors might get returns of between 70% and 90% in USD and between 65% and 90% in-kind, depending on the denomination of the digital asset.
Since Genesis was the custodian for Gemini’s Earn Product, the crypto exchange took the worst hit when Genesis declared bankruptcy. Gemini claims that Genesis owes them around $1 billion in client money. Gemini sued Genesis parent company DCG after it refused to return the money. To counter this, DCG has filed a move to dismiss the action.
Highlighted Crypto News Today:
