Cryptocurrency exchange Gemini has agreed to put up US$100 million to Earn users’ asset recovery as part of bankrupt lender Genesis Capital’s in-principle agreement with parent firm Digital Currency Group (DCG) and other creditors. The agreement plans to place all Genesis entities under one holding company, Genesis Global Holdco.
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- Under the in-principle agreement, DCG will exchange its existing US$1.1 billion note due in 2032 for convertible preferred stock and refinance its 2023 term loans worth around half a billion dollars to be made payable to creditors.
- In Dec. 2020, Genesis entered an agreement with Gemini on Gemini Earn, a program that allowed investors to loan their crypto assets to Genesis for up to 8% interest.
- Genesis halted user withdrawals for Gemini Earn in Nov. 2022 following the collapse of FTX and Singapore-based hedge fund Three Arrows Capital earlier in the year, leading to a public spat between Gemini co-founder Cameron Winklevoss and DCG Chief Executive Officer Barry Silbert.
- Last month, Winklevoss alleged in a letter to Silbert that Genesis funds were frozen because DCG did not repay a US$1.675 billion loan to the lender. Winklevoss also alleged that DCG’s lending arm owed Gemini Earn users US$900 million.
- Genesis filed for Chapter 11 on Jan. 20. Its aggregated liabilities as of the date of the filings, were worth around US$1 billion to US$10 billion to more than 100,000 creditors.
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