According to a source familiar with the case, CoinDesk reports that Genesis and its parent company Digital Currency Group (DCG), are moving ahead with the crypto lender’s bankruptcy filing. The two companies have agreed in principle to restructure Genesis – where it will be forced to “wind down” its loan book and sell off some of its subsidiaries. Furthermore, DCG and Genesis were able to persuade creditors to accept this proposal.
DCG Will Pay $600 Million in Various Ways
Moreover, the prime agreement necessitates that DCG will refinance its $500 million loan in cash and another $100 million in Bitcoin from its subsidiary. Despite not providing more information about the bargain, it was mentioned that refinancing would comprise converting a 10-year promissory note provided by DCG to Genesis as compensation for 3AC’s (Three Arrows Capital) failed claims.
DCG and Genesis have arrived at an agreement with creditors, including individuals, companies, and those who subscribed to the Gemini Earn program from the Gemini exchange. This proposal was made after claims against the crypto lending firm exceeded $2 billion. Now, they will extend a similar offer to other creditors alike.
What Does This Agreement Mean for Gemini Users?
On January 20th, Genesis, a crypto-lending firm, declared bankruptcy after multiple unfavorable occurrences. Digital Currency Group (DGC) issued Genesis a promissory note to remain solvent and keep the company running. Unfortunately for them, FTX’s collapse created so much pressure on the business that it had no choice but to close up shop.
In this predicament, Gemini Earn users were unable to access their funds. Cameron and Tyler Winklevoss of the crypto exchange have communicated with DCG and Barry Silbert to ensure that these consumers are fully compensated for their loss.
Despite their best efforts, the parties involved have yet to be able to come to an agreement. Therefore, it remains to be seen whether they will agree on the original deal and progress forward with it. Interestingly enough, Cameron Winklevoss saw Genesis‘ filing for bankruptcy as a “key move towards recovering your investments.” If Gemini enters and approves of the understanding, DCG and Silbert can dodge more legal suits against them. Furthermore, Gemini Earn customers would stand a better chance of getting back their money if this were to occur.
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