- The remuneration plan projected a recovery of approximately 95–110% without requiring any contribution from Gemini itself.
- The previous proposal submitted by DCG was deemed “wholly insufficient” by Genesis.
Digital Currency Group (DCG) has unveiled a new agreement plan to creditors of its bankrupt subsidiary Genesis Global, potentially enabling Gemini Earn users to recover nearly all of their claims.
This proposal, filed on 13 September, outlines a plan aimed at granting unsecured creditors a substantial recovery of 70–90%. A significant portion of that recovery will be provided in digital currencies.
The remuneration plan projects a recovery of approximately 95–110% without requiring any contribution from Gemini itself. DCG suggested that if Gemini allocates $100 million, users could potentially receive more than a full recovery.
Novel agreement aims to recover funds in the midst of Genesis Global’s bankruptcy crisis
The Genesis saga began with the implementation of Gemini Earn, a service introduced by the cryptocurrency exchange Gemini in collaboration with Genesis. However, the fortunes of Gemini Earn users took a downturn when Genesis filed for bankruptcy protection, resulting in the freezing of withdrawals.
Genesis initially filed for bankruptcy in January 2023. This stemmed from the suspension of withdrawals triggered by a massive liquidity crisis in November 2022. The company found itself indebted to the tune of over $3.5 billion, with Gemini among its top creditors.
This marks the second proposed agreement in the case. The previous plan submitted by DCG on 29 August offered DCG equity as part of the settlement.
However, Genesis lenders expressed dissatisfaction with the offer, deeming it “wholly insufficient.” They argued that the debtors were failing to meet their fiduciary obligations to maximize creditor recoveries.
In response to the mounting challenges, Genesis took legal action against its parent company, DCG, and DCG Investments, one of its affiliates. On 6 September, a lawsuit was initiated, seeking redress for defaulted loans amounting to approximately $600 million.
Amid this turmoil, Genesis Global Trading announced its decision to discontinue its cryptocurrency spot trading service, effective 18 September, 2023.
DCG’s latest proposal holds promise for both unsecured creditors and Gemini Earn users, potentially offering them significant recoveries and a path toward resolving the Genesis bankruptcy situation.
