DCG Still In Discussions, Genesis Creditors Still In Limbo

The parent business of crypto firm Genesis Capital, Digital Currency Group (DCG), has revealed it has no solution to its “outstanding intercompany obligations” that could help reimburse creditors.

In response to creditor demands, DCG said it was in the middle of a 30-day mediation phase with Genesis. In February, the firm offered a settlement proposal in which Genesis creditors were projected to obtain an 80% recovery of funds after the firm filed for Chapter 11 bankruptcy.

“DCG continues to be engaged with the various stakeholders in the Genesis Capital restructuring process pursuant to the 30-day mediation period entered into by all parties on May 1,” the firm said in a statement.

However, Genesis creditors increased their demands in April, interrupting the bankruptcy procedures and the “agreement in principle” between the two corporations. When it filed for bankruptcy, Genesis stated that its liabilities were between $1 billion and $10 billion.

“On a parallel path and to provide further financial flexibility, DCG is in discussions with capital providers for growth capital and to refinance its outstanding intercompany obligations with Genesis,” DCG added. “We are committed to reaching a fair outcome for all and look forward to a productive resolution during this mediation period.”

Following Genesis’ bankruptcy, the problematic crypto company has frequently been at the heart of legal disputes between DCG and cryptocurrency exchange Gemini. DCG and Genesis apparently owed approximately $900 million to Gemini’s clients who had their Earn funds frozen – Genesis operated the scheme in collaboration with Gemini. In January, Gemini co-founder Cameron Winklevoss threatened to sue DCG and CEO Barry Silbert if they did not grant Gemini creditors “a fair deal.”

In response to the enterprises’ financial difficulties, US authorities have also taken action. Genesis and Gemini were charged with marketing unregistered securities by the Securities and Exchange Commission in January, and the New York State Department of Financial Services was also apparently investigating Gemini for its Earn program.

The 30-day period of reflection gives DCG and Genesis until the end of May to reach an agreement on the proposed restructuring plan. Genesis stated in its original Chapter 11 filing that it intended to sell its assets at auction and exit bankruptcy on May 19.


Information for this briefing was found via Coin Telegraph and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

When 4% of Global Copper Disappears Overnight | David Gower – Emerita Resources

Mining M&A: Gold X2 Acquires Kesselrun Resources

They Said Oil Was Dead. They Were Wrong. | Michael Judson – Record Resources

Recommended

Steadright Enters MOU To Acquire Historic Goundafa Polymetallic Mine In Morocco

Military Seizes Power in Madagascar After President Flees

Related News

Genesis Wants Sale of Grayscale Trust Assets For Gemini Earn Users

Genesis filed a Motion Authorizing Sale of Trust Assets late yesterday, marking a crucial move...

Monday, February 5, 2024, 04:04:00 PM

DCG Missed $630-Million Payment, Says Gemini

Digital Currency Group (DCG) missed a $630 million payment that was due the week of...

Tuesday, May 23, 2023, 03:04:00 PM

Genesis Lending Arm Halts Withdrawals Following FTX Bankruptcy

The implosion and eventual bankruptcy of crypto exchange FTX claims another–this time, it’s the lending...

Wednesday, November 16, 2022, 08:51:00 AM

SEC Charges Both Gemini And DCG’s Genesis For Unregistered Securities Sale With Earn Program

Just like what we said and expected, the battle between Digital Currency Group (DCG) and...

Friday, January 13, 2023, 10:37:21 AM

Gemini Earn Program Sees Customer Funds Locked Up With Genesis

Contagion continues to occur at a rapid pace within the crypto sector. After FTX filed...

Wednesday, November 16, 2022, 09:23:42 AM