Digital currency exchange Gemini is attempting to encourage various other creditors behind a plan to get more money from bankrupt cryptocurrency lending company Genesis‘ parent firm, the Digital Currency Group (DCG), This, according to an update from the Information shared this past Friday.
The latest proposal may involve various creditors’ fronting funds in order to assist with paying others back in a timely manner in return for a larger share of any funds obtained by suing DCG, and maps out various options for creditors, determining that they may recover as much as $2.8 billion from Genesis.
DCG, Genesis and Gemini have not yet responded to requests from media outlets for detailed comments on this issue. However, the Information has cited two sources familiar with the matter in its latest update.
Genesis had filed for bankruptcy back in January 2023, owing around $3.4 billion to creditors and had reached an agreement in principle regarding a potential restructuring plan, backed by DCG, as well as its main creditors, including Gemini, in February of this year.
Genesis and DCG recently made an in-principle agreement with Genesis’ creditors in order to address claims that were brought at the time of the crypto lender’s bankruptcy filing.
The plan might result in a recovery of around 70%-90% in USD, which is the equivalent for unsecured creditors and 65%-90% recovery on an “in-kind basis” (which would depend on the actual denomination of the digital assets, as outlined in a filing).
As covered in July, digital asset firm Gemini, one of the largest creditors of bankrupt virtual currency lending platform Genesis, has reportedly sued parent firm Digital Currency Group (DCG) and its CEO. This update has been announced the day after DCG missed the crypto exchange’s deadline for agreeing to a restructuring process for the VC firm’s troubled division.
DCG and Gemini, two major businesses in the crypto-assets sector, have argued many times during the last few months after the collapse of Genesis, which filed for bankruptcy back in January 2023.
The lawsuit states that DCG and its Chief Executive Officer Barry Silbert had intentionally misrepresented the accounting treatment of various liabilities that DCG allegedly assumed from Genesis as a result of losses Genesis incurred from the demise of Singapore-headquartered crypto-asset hedge fund Three Arrows Capital back in June of last year.