Genesis Reaches Restructuring Agreement, Gemini Offers $100 Million for Earn Users

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Overview

  • Genesis, a subsidiary of Digital Currency Group, has reached an agreement with creditors to restructure debt.
  • The plan will include the sale of Genesis Global Trading and the issuance of convertible preferred stock.
  • Cameron Winklevoss of Gemini has stated that Gemini will contribute up to $100 million more for the recovery for Earn users.

Restructuring Agreement

Genesis, a subsidiary of Digital Currency Group (DCG), has reached a restructuring agreement with key creditors according to statements by Cleary Gottlieb attorney Sean O’Neal. The agreement will see the sale of Genesis Global Trading and other moves designed to “maximize the recoveries to the estate”. Included in the deal is also the restructurings of debts owed by DCG to Genesis Holdco, which was one of entities previously filing for Chapter 11 protection. These terms include a second lien term loan facility with a maturation date of June 2024. According to O’Neil’s statement, within this plan there are two tranches – one denominated in U.S. Dollars that pays 11.5% interest and another denominated in Bitcoin that pays 5% interest. In addition, DCG agreed to issue a type of convertible preferred stock, however specifics are still being determined at this time.

Reasons For Restructuring

Genesis’ lending arm was forced to halt withdrawals back in November 2022 due to contagion from collapse crypto exchange FTX earlier that same month. Subsequently, Genesis filed for bankruptcy last month with their lawyers anticipating reaching a deal with creditors by end January 2023. Moreover, Genesis’ collapse led to freezing withdrawals for users who were receiving yield through arrangements via its lending arm – Gemini Earn users were most affected by this situation causing Cameron Winklevoss President at Gemini express his displeasure through letter posted on Twitter addressing issues caused by it.

Gemini Contribution To Recovery

In response during hearing today Cameron Winklevoss tweeted that Gemini will contribute up $100 million more towards recovery process for Earn users as they still do not have access funds yet due current state affairs surrounding it.

To conclude Genesis restructuring agreement between company representatives and key creditors is expected reach completion by end January 2023 making way possible resolution crisis affected those associated its lending arm including Gemini Earn users who may expect financial contribution up $100 million towards their respective recovery courtesy Gemni leadership team .

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