Genesis filed for Chapter 11 bankruptcy protection in January 2023.
Gemini claims Genesis owes them about $1 billion in customer money.
According to a court filing on August 29, Digital Currency Group (DCG) and insolvent cryptocurrency lender Genesis reached an agreement in principle to settle the claims of creditors.
The shutdown of the cryptocurrency exchange FTX led to a major liquidity problem. Genesis filed for Chapter 11 bankruptcy protection in January 2023.
The insolvent cryptocurrency lender has $630 million in unsecured debt due in May 2023, according to Genesis parent DCG. It also has $1.1 billion of unsecured debt due in 2023. 2032.
Relief to creditors
DCG intends to enter into additional financing agreements and repayment agreements according to the terms of the concluded agreement in principle. The senior loan is $328.8 million with a term of 2 years. There is also a $830 million second lien with a term of 7 years.
According to the statement, DCG plans to pay its creditors $275 million in four installments. According to the filing, unsecured creditors could receive 70 to 90 percent in dollars and 65 to 90 percent in kind if the proposal passes, depending on the face value of the digital asset.
Since Genesis was the owner of Gemini’s Earn Product, the crypto exchange took the biggest hit when Genesis declared bankruptcy.
Gemini claims Genesis owes them about $1 billion in customer money. Gemini sued Genesis’ parent company, DCG, after it refused to repay the money. To counter this, DCG sought dismissal of the suit.