In a significant development within the cryptosphere, Digital Currency Group (DCG) has tentatively settled with Genesis creditors with a reimbursement proposal ranging between 70-90%. This move comes in the aftermath of the unraveling FTX fiasco.
Genesis, the lending subsidiary of DCG, filed for bankruptcy in January 2023, subsequently revealing that it owed its top 50 creditors almost $3.5 billion. This considerable debt included debts owed to the high-profile Gemini, a trading platform owned by the Winklevoss twins, as well as trading giant Cumberland, MoonAlpha Finance, VanEck’s New Finance Income Fund, and Mirana. The resolution suggests recovery of 65% to 90% based on the specific cryptocurrency denomination. However, these figures remain flexible, hinging on the final agreement between the two parties and market rates at that time.
The proposal outlines an arrangement where DCG will settle approximately $328.8 million via loans with a two-year term. Furthermore, a staggering $830 million will be handled with a seven-year term loan. Other repayments include the disbursement of $275 million in four chunks, in response to the May 2023 loan repayment due dates.
This blueprint for creditor reimbursement has emerged against the backdrop of a recent spat with Gemini, in which the latter is demanding a repayment of $766 million. The escalation came when Gemini Earn decided to sue Barry Silbert and his DCG for fraud, pointing fingers at false financial reporting. According to Gemini, DCG, along with Barry Silbert and Genesis, worked in concert to obscure the truth by issuing hedged financial reports.
The core of this accusation lies in the allegation that DCG, instead of footing the bills for its subsidiary’s losses, issued Genesis a 10-year promissory note with a meager 1% interest rate. This essentially translates to just a fraction of its $1.1 billion face value.
While cautious optimism surrounds DCG’s reimbursement plan, its validity largely depends on market swings and the final agreement’s details. The volatile landscape of cryptocurrency coupled with the ongoing lawsuits rattle this emergence, leaving stakeholders at the edge.
Source: Cryptonews
