DCG Agrees to Settle Claims of Bankrupt Lender Genesis, Good News for Gemini?

Bhushan Akolkar
August 29, 2023
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DCG Digital Currency Group

As per the recent court filing on Tuesday, August 29, the Digital Currency Group (DCG) has entered an in-principle deal with bankrupt crypto lender Genesis, to settle the creditors’ claims.

Earlier this year in January 2023, Genesis filed for Chapter 11 bankruptcy after facing a major liquidity crisis following the collapse of crypto exchange FTX. The recent filing from Genesis parent DCG notes that the bankrupt crypto lender holds liabilities of $630 million in unsecured loans due in May 2023. Additionally, it also has a $1.1 billion unsecured promissory note due in 2032.

As per the in-principle deal, the Digital Currency Group (DCG) is looking to undertake new debt facilities along with a repayment agreement. This will include a $328.8 million first-lien facility along with 2-year maturity. Additionally, it will also include a $830 million second-lien facility with a 7-year maturity.

The filing notes that DCG is planning to pay a total of $275 million to its creditors in four installment payments. If executed, the proposed plan could lead to anticipated returns of approximately 70% to 90% for unsecured creditors in terms of U.S. dollars, and a recovery range of 65% to 90% in-kind based on the denomination of the digital asset, as stated in the filing.

Will Gemini Benefit From Genesis Settlement?

Following the bankruptcy of Genesis, crypto exchange Gemini has suffered the most as Genesis was the custodian of Gemini’s Earn Product. As per Gemini, Genesis owes them close to $1 billion as part of its customers’ funds.

On refusal to give back the funds, crypto exchange Gemini also filed a lawsuit against Genesis-parent DCG. However, DCG has filed a motion to dismiss the lawsuit stating that the lawsuit is “a continuation of the Winklevoss’s year-long Twitter-based character assassination.”

It’s not clear whether the current settlement plan will involve some partial refunds to Gemini. Genesis has outstanding debts of approximately $3.6 billion to its top 50 creditors. This also includes obligations to entities like Gemini, the cryptocurrency exchange established by the Winklevoss twins.

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Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets. 

He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.