Digital Currency Group (DCG), the parent company of Genesis, the insolvent crypto lending firm, has put forward a comprehensive repayment plan for its creditors. The proposed plan offers a glimmer of hope for creditors, particularly those participating in Gemini Trust Co.’s Earn program.
Read the full filing here: https://t.co/6SsWj4zo3R
— Digital Currency Group (@DCGco) September 13, 2023
In a filing on September 13, DCG reassured investors in the Gemini Earn program that they stand a chance to receive complete reimbursement, possibly even surpassing their initial investments. This represents a significant development in the ongoing saga surrounding Genesis’s bankruptcy. Under this proposal, partial repayments will be issued in the form of Bitcoin (BTC) and Ethereum (ETH).
Improved Recovery for Unsecured Creditors
Moreover, this filing outlines a potential recovery range of 70% to 90% for other unsecured creditors of Genesis. This marks a substantial improvement compared to the expected payouts for customers of other insolvent crypto service providers like Voyager Digital and BlockFi Inc. DCG is making these efforts to garner support from Earn program investors and other Genesis creditors.
However, it’s important to note that Gemini Trust Co. initially rejected the proposed repayment plan earlier this month. Gemini expressed doubts about the concrete evidence supporting the claim that Earn users could recover between 70% and 90% of their investments.
DCG countered Gemini’s stance by highlighting potential conflicts of interest between Gemini and its founders, the Winklevoss twins, and Earn program participants. This conflict arises from the joint effort between Genesis and Gemini in the Earn program, which promised clients an 8% interest rate on their digital assets.
DCG Embarks on a Potential Road to Full Recovery
The proposed creditor agreement in Genesis’s bankruptcy proceedings aims to renegotiate a $630 million loan between Genesis and DCG. If approved by creditors, this agreement could result in Gemini Earn users recovering the full value of their crypto holdings.
DCG has been actively engaged in negotiations to resolve the Genesis bankruptcy situation. The ongoing feud between DCG and Gemini, which began when Genesis froze withdrawals from its Earn program, has further complicated matters. The dispute led to legal actions and investigations by the U.S. Federal Bureau of Investigation and the Securities and Exchange Commission.
While challenges remain, this development signifies progress in the resolution of the Genesis bankruptcy case.