Genesis and Digital Currency Group Reach Initial Agreement With Creditors
According to remarks made by Sean O’Neal of Cleary Gottlieb, who is representing Genesis, a division of Digital Currency Group (DCG), a restructuring agreement has been reached with creditors. The sale of Genesis Global Trading would be one part of this plan to maximize recovery.
The agreement will also include restructurings of the debt owed by DCG to Genesis Holdco, one of the entities that previously applied for Chapter 11 protection. These conditions include a second lien term loan arrangement with a June 2024 maturity date.
O’Neal commented that two tranches will be included in the proposal, one with a dollar-dominated portion that would pay 11.5% interest and another with a Bitcoin-dominated portion that will pay 5% interest. In addition, DCG has consented to issue a type of convertible preferred stock and the details of this issuance are still being worked on.
Following the collapse of the cryptocurrency exchange FTX earlier in the same month, the lending arm of Genesis was compelled to halt withdrawals in November 2022. The company declared bankruptcy last month, and its attorneys said they hoped to settle matters with creditors by the end of January 2023.
Users of Gemini Earn, who received yield from Genesis’ lending arm, had their withdrawals frozen as a result of Genesis’ bankruptcy. Gemini’s president, Cameron Winklevoss, had voiced his displeasure with the situation in an open letter that was shared on Twitter.
He tweeted during the hearing on February 6th that Gemini will provide an additional $100 million toward the recovery of assets for Earn users who are still unable to access them.