Gemini intends to submit a new request to the court to reclaim $1.1 billion worth of digital assets from Genesis, which is owned by DCG.
Gemini, the cryptocurrency exchange facing difficulties, is thinking about using forbearance against Digital Currency Group (DCG). DCG failed to make a repayment of $630 million last week.
When a lender agrees to forbearance, it means the borrower can temporarily lower or halt their mortgage payments. However, the borrower is required to repay the reduced or paused payments at a later time.
Gemini, in its updated response, stated that the decision on forbearance would depend on whether DCG engages in fair negotiations for a mutually agreeable deal. If the parties cannot reach a deal, Gemini intends to collaborate with Genesis Capital, owned by DCG, to propose alternative terms for a reorganization plan that can move forward without DCG’s agreement.
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On May 19th, Genesis submitted a request to the bankruptcy court to extend its exclusive period for proposing a plan.
The repayment dispute between Gemini and DCG began when Genesis filed for Chapter 11 bankruptcy in late January this year. In February, Gemini co-founder Cameron Winklevoss threatened legal action against DCG and its CEO Barry Silbert regarding the repayment of a $900 million loan.
4/ Crucially, the decision to put Genesis into bankruptcy does not insulate Barry, DCG, and any other wrongdoers from accountability.
— Cameron Winklevoss (@cameron) January 20, 2023
Based on the court documents, Genesis has a debt of over $3.5 billion to its top 50 creditors, which include Gemini, Cumberland, Mirana, MoonAlpha Finance, and VanEck’s New Finance Income Fund. The settlement process of Genesis has faced controversies right from the start.
Genesis and DCG reached a preliminary agreement, and Genesis submitted a complete settlement to the bankruptcy court in February. Initially, creditors of Genesis were expected to recover 80% of their lost funds through the settlement. However, later on, the creditors raised their demands, causing the initial settlement plans to be disrupted.
Gemini has created a new document called the “Gemini Master Claim” that they intend to submit by May 22nd. This claim aims to recover more than $1.1 billion worth of digital assets that Genesis has declined to return to approximately 232,000 Earn users who had active loans as of January 19, 2023.
Important: This article is intended solely for informational purposes. It should not be considered or relied upon as legal, tax, investment, financial, or any other form of advice.
