Users of Gemini Earn could potentially see a significant recovery of their precious cryptocurrency holdings, thanks to a proposed agreement between DCG and Genesis. Submitted in a Wednesday filing, the deal could mean that creditors recuperate between 70% to 90% of their funds, remarkable for any liquidating Chapter 11 case, but extraordinary in the erratic world of cryptocurrency.
The latest proposal, built on earlier offers suggesting compensation in DCG equity form, implies that creditors could reap benefits from the soaring appreciation of digital currencies. With projected enticing amounts equivalent to “$85,000 for BTC and $8,500 for ETH“, it’s not hard to see why DCG envisages this as a powerful incentive for creditors to subscribe to the deal.
However, hanging in the balance is the need for creditor approval for the deal to implement, aiming to reset the terms of a hefty $630 million loan between Genesis and DCG. These terms would mandate a partial cash repayment soon after closure, leading to an outstanding amount transferred into a two-year note.
Gemini Earn, owing around $1.1 billion to its users, is in a fairer position than others, due to the collateral posted by Genesis during their professional association. This collateral, about 31 million shares of GBTC, has appreciated spectacularly and accounts for about 60% of what’s owed to Earn clients. Thus, Gemini Earn creditors potentially stand to gain as much as 110% of their total claim.
Such an outcome is only possible with Gemini’s pledge to provide $100 million made in February or if it decides to distribute even a minuscule portion of the collateral. But, DCG’s filing claims that Gemini isn’t living up to its word, failure to provide “a single penny to provide Gemini Earn users a better recovery”.
This leaves the remaining balance to be covered by Genesis’ held assets, which include cash, stablecoins, and payments from DCG in longer-term notes. DCG expresses its pride over the proposed arrangement, asserting its belief that those with claims, Gemini Earn users included, deserve the chance to vote on the deal.
However, the crypto enthusiasts can’t overlook the fact that the ongoing negotiations between Genesis and creditors have caught the attention of the US Federal Bureau and Securities and Exchange Commission due to accusations of misleading investors. It’s a stark reminder of the need for vigilant and comprehensive regulations in the fledgling world of cryptocurrency.
Source: Cryptonews
