Bankrupt crypto lender, Genesis, and its parent group, Digital Currency Group (DCG), have reached an agreement with Gemini in the bankruptcy court. The groups agreed in principle on a plan enabling Earn users to recover their assets.
Announcing this in a Twitter post, Gemini’s co-founder, Cameron Winklevoss, stated this was a critical step towards a significant recovery of assets for all Genesis creditors.
The agreement resolves some of the major issues that pushed Genesis into filing for Chapter 11 bankruptcy. It involves closing Genesis loan books and the sale of its entities.
Under the terms of the agreement, DCG will exchange its existing $1.1 billion notes due in 2032 for convertible preferred stock. It would also refinance its existing 2023 term loans through a new, junior-secured term loan in two tranches. This would be made payable to creditors in the aggregate total value of approximately $500 million.
In addition to this, DCG will contribute its equity interest in Genesis Global Trading (GGT) to Genesis Global Holdco, bringing all Genesis entities under the same holding company.
On the other hand, Gemini agreed to contribute up to $100 million to Earn users. This further reiterates the crypto exchange’s commitment to helping users regain all their assets.
According to a statement by Gemini,
“There is still much work to be done to complete this process, including further due diligence of Genesis financials and judicial approval of this plan, but we are confident that we now have a framework in place to execute on.”
Gemini stated it had worked tirelessly since November 16, 2022, to bring this to fruition. The exchange is immensely grateful to its customers for their patience and support, allowing the firm to maximize its efforts.
