The plan would see the sale of Genesis along with other steps in a deal reached with DCG and Gemini Trust Co.
Genesis, a subsidiary of Digital Currency Group, has reached a restructuring agreement with key creditors according to statements by Cleary Gottlieb’s attorney, Sean O’Neal, who is representing Genesis. He would see the sale of Genesis Global Trading, among other moves designed to “maximize equity recoveries.”
Also included in the agreement will be restructurings of the debt that Digital Currency Group, owner of Genesis and its entities, owes to Genesis Holdco, which was one of the legal entities that previously filed for Chapter 11 protection. These terms include a credit line second lien term loan with a maturity date of June 2024.
According to O’Neal, within the plan there will be two tranches, one dominated in US dollars that will pay 11.5% interest, and another denominated in bitcoin that will pay 5% interest. O’Neal also detailed that DCG has agreed to issue a type of convertible preferred stock, however details of this issuance are still being determined.
Genesis’ lending arm was forced to halt withdrawals in November 2022 after contagion from the crash of crypto exchange FTX earlier that same month. The company filed for bankruptcy last month, and its lawyers said then that they anticipate settling with creditors by the end of January 2023.
The Genesis collapse also led to a freeze on withdrawals for Gemini Earn users, who received returns through deals with Genesis’s lending arm. Cameron Winklevoss, president of Gemini, had previously expressed his dissatisfaction with the situation through a letter posted on Twitter addressing the issues. During today’s hearing, he tweeted that Gemini will contribute up to $100 million more for the recovery of Earn users, who do not yet have access to their funds.
