• Genesis, a subsidiary of Digital Currency Group, has reached a restructuring agreement with key creditors.
• This agreement includes the sale of Genesis Global Trading and restructurings of the debt that Digital Currency Group owes 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
Genesis, a subsidiary of Digital Currency Group, has reached a restructuring agreement with key creditors according to statements by Cleary Gottlieb attorney Sean O’Neal. This would see the sale of Genesis Global Trading, amongst other moves designed to “maximize the recoveries to the estate.”
Debt Restructuring Details
The deal also includes restructurings of the debt that Digital Currency Group, who owns Genesis and its entities, owes to Genesis Holdco. These terms include a second lien term loan facility with a maturation date of June 2024. There will be two tranches: one dominated in U.S. dollars paying 11.5% interest and another denominated in bitcoin paying 5% interest; DCG has agreed to issue convertible preferred stock as well though specifics are still being determined.
Background on Collapse
The lending arm of Genesis was forced to halt withdrawals in November 2022 after contagion from FTX’s collapse earlier that same month; they filed for bankruptcy last month anticipating reaching an agreement with creditors by January 2023. The freeze on withdrawals also affected Gemini Earn users who received yield through arrangements with Genesis’ lending arm and have yet to receive their funds back since then.
Cameron Winklevoss tweeted during today’s hearing that Gemini will contribute up to $100 million more for the recovery for Earn users who still do not have access to their funds.
The restructuring agreement between Genesis and its key creditors is expected to maximize recoveries for all involved parties; however specifics on certain aspects such as issuing convertible preferred stock are still being decided upon at this time whilst Gemini continues providing assistance towards affected Earn users awaiting their funds back from before November 2022