Sun. May 26th, 2024

• Genesis, a subsidiary of Digital Currency Group, has reached a restructuring agreement with creditors in order to maximize the recovery of their estate.
• This includes the sale of Genesis Global Trading and restructurings of debt owed to Genesis Holdco.
• Gemini will contribute up to $100 million more for the recovery for Earn users who still do not have access to their funds.

Genesis Reaches Restructuring Agreement With Creditors

Genesis, a subsidiary of Digital Currency Group, has reached an agreement with key creditors regarding its restructuring in order to “maximize the recoveries to the estate”. The terms include two tranches – one denominated in U.S. dollars paying 11.5% interest and another denominated in Bitcoin paying 5% interest – and a convertible preferred stock issuance.

Debt Restructuring For Digital Currency Group

The deal also includes restructurings of debt that Digital Currency Group owes to Genesis Holdco, one of the legal entities that previously filed for Chapter 11 protection. This debt is part of a second lien term loan facility with a maturation date set at June 2024.

Gemini To Contribute Up To $100 Million More

The collapse of Genesis led to freezing withdrawals for Gemini Earn users who had received yield through arrangements with its lending arm. In response, Cameron Winklevoss (President of Gemini) tweeted that they would contribute up to $100 million more for the recovery effort for these users who still do not have access to their funds.

Background

The lending arm of Genesis was forced into halting withdrawals back in November 2022 after FTX (a crypto exchange) collapsed earlier that same month. As such, Genesis then filed for bankruptcy last month and lawyers anticipate reaching an agreement with creditors by the end of January 2023.

Conclusion

In conclusion, it appears that steps are being taken towards recovering from this situation as both Genesis and Gemini appear willing to put resources towards ensuring those affected by this event receive restitution or reasonable compensation for their losses where possible.

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