Cryptocurrency exchange Gemini shall reportedly plug up to $100 million in cash in Genesis to help recover the bankrupt lender. Genesis states the said funds would offer support to its Earn users—having over $900 million in frozen assets at the time of paused withdrawals.
The monetary contribution is pursuant to Gemini’s recent restructuring deal and recovery deal with Genesis Global Capital (GGC) and Digital Currency Group (DCG). The said $100 million will allow Genesis’ Earn users to enable recovering their assets, per a recent Bankruptcy Court hearing.
Announcing the development, Gemini co-founder Cameron Winklevoss tweeted:
1/ Today, @Gemini reached an agreement in principle with Genesis Global Capital, LLC (Genesis), @DCGco, and other creditors on a plan that provides a path for Earn users to recover their assets. This agreement was announced in Bankruptcy Court today.
— Cameron Winklevoss (@cameron) February 6, 2023
Genesis has reportedly loaned DCG over $500 million in cash and Bitcoin (BTC). The said recovery plan deal is based around refinancing Genesis’ loans to DCG. DCG offered a $1.1 billion promissory note to Genesis following the collapse of Three Arrows Capital (3AC).
DCG is also set to issue to Genesis creditors convertible preferred stock. DCG shall reportedly refinance its current 2023 term loans via a junior secured term loan in two parts (with a June 2024 maturity). The payable interest on these loans would be 11% and 5%, respectively. It would be accessible to creditors in the aggregate total value of $500 million
Winklevoss states, this plan is a critical step forward towards a substantial recovery of assets for all Genesis creditors. Gemini’s continued commitment to helping Earn users achieve a full recovery is now apparent.
Winklevoss also explains that the financials of Genesis are due for a due diligence plus a judicial approval of the plan is to be sought. Enabling a “substantial recovery of assets for all Genesis creditors,” the Earn users, per Winklevoss, can get status updates via the Earn status page.
