DCG and Genesis Reach Agreement with Creditors, Gemini to Contribute $100M
By Digital Currency Group (DCG) and Genesis have announced a new in-principle agreement with a key group of creditors over the restructuring of its crypto trading business and lending arm, which filed for bankruptcy protection last month.[0] With the agreement, the creditors, representing more than $2 billion in asserted claims against Genesis Global Capital, will receive a minimum of 80% of their funds back.[1]
The agreement includes refinancing DCG’s existing 2023 term loans from Genesis with an aggregate value of $526 million, to be made available for payment to the creditors.[2] In addition, Gemini Trust Co. co-founder Cameron Winklevoss announced that the company will contribute “up to $100 million more for Earn users as part of the plan.”[3] On November 16, Genesis announced that it was ceasing its lending operations, resulting in an interruption of access to funds for Gemini Earn customers due to the partnership between Gemini and Genesis for the yield earning product.[4]
DCG has also come to the decision to issue a type of convertible preferred stock; however, the specifics have yet to be finalized.[5] This convertible stock will be exchanged for the company's existing $1.1 billion promissory note, which is due in 2032.[4]
As part of the agreement, DCG will contribute its equity interest in Genesis Global Trading to Genesis Global Holdco, bringing all Genesis entities under the same holding company.[6] Afterwards, Genesis Trading and Genesis Capital will proceed through a sale process in order to repay creditors' funds.[7] DCG and Genesis Global Holding anticipate emerging from bankruptcy in a period of four months.[7]
Court filings on Feb. 4 revealed the appointment of a seven-member committee to represent the interests of unsecured creditors in the Genesis Global bankruptcy case.[8] The disagreement eventually resulted in Gemini's Earn program coming to an end and its agreement with Genesis being terminated shortly prior to Genesis filing for bankruptcy.[9]
Complications arising from the collapse of FTX were further compounded on January 12th when the Securities and Exchange Commission (SEC) filed a lawsuit against both companies, citing unregistered securities offerings made through Gemini.[9] Crypto exchange Gemini will contribute up to $100 million in cash, earmarked for its customers, as part of the agreement.[10]
Will the agreement be satisfactory to the other creditors of Genesis?[9] Please leave a comment to let us know.[9]
0. “DCG, Genesis Reach Consensus with Creditors on Restructuring Plan: Report” ihodl.com, 6 Feb. 2023, https://ihodl.com/topnews/2023-02-07/dcg-genesis-reach-consensus-creditors-restructuring-plan-report/
1. “Co-Founders of Crypto Exchange Gemini Step Up to Contribute $100M to Genesis Bankruptcy Recovery” Blockchain Reporter, 7 Feb. 2023, https://blockchainreporter.net/co-founders-of-crypto-exchange-gemini-step-up-to-contribute-100m-to-genesis-bankruptcy-recovery
2. “DCG and Genesis Reach Initial Deal With Key Creditors By CoinEdition” Investing.com, 7 Feb. 2023, https://www.investing.com/news/cryptocurrency-news/dcg-and-genesis-reach-initial-deal-with-key-creditors-2996798
3. “Genesis, DCG reach agreement: Gemini Earn users one step closer to recover – Cryptopolitan” Cryptopolitan, 7 Feb. 2023, https://www.cryptopolitan.com/genesis-dcg-reach-agreement-with-gemini
4. “Genesis Bankruptcy Restructuring Advances with DCG’s Plan to Sell Trading Division” Coinpedia Fintech News, 7 Feb. 2023, https://coinpedia.org/news/genesis-bankruptcy-restructuring-advances-with-dcgs-plan-to-sell-trading-division
5. “Genesis, DCG, Gemini reach bankruptcy agreement” Yahoo Finance, 6 Feb. 2023, https://finance.yahoo.com/genesis-dcg-gemini-reach-bankruptcy-agreement-205252294.html
6. “DCG Creditor Pact Revealed With Plan to Sell Genesis Trading Unit as Part of Bankruptcy” Yahoo Life, 6 Feb. 2023, https://www.yahoo.com/lifestyle/dcg-creditor-pact-revealed-plan-220257892.html
7. “Crypto Prices To Recover As DCG, Genesis, Gemini, Reach Deal?” CoinGape, 7 Feb. 2023, https://coingape.com/crypto-prices-to-recover-as-dcg-genesis-gemini-and-creditors-reach-agreement/
8. “Committee Appointed to Represent Unsecured Creditors in Genesis Global bankruptcy” Blockchain.News, 5 Feb. 2023, https://blockchain.news/news/committee-appointed-to-represent-unsecured-creditors-in-genesis-global-bankruptcy
9. “DCG And Genesis Reach an “In Principle” Agreement With Creditors” The Tokenist, 6 Feb. 2023, https://tokenist.com/dcg-and-genesis-reach-an-in-principle-agreement-with-creditors/
10. “Winklevoss twins' crypto exchange Gemini to contribute $100 million to Genesis bankruptcy recovery” CNBC, 6 Feb. 2023, https://www.cnbc.com/2023/02/06/gemini-to-contribute-100-million-to-genesis-bankruptcy-recovery-plan.html
