Digital Currency Group (DCG) has proposed a new agreement plan for the creditors of the now-bankrupt Genesis Global that would also see Gemini Earn users recover nearly all of their claims.
In a new filing on Sept. 13, DCG outlined a plan that estimates “unsecured creditors a 70–90% recovery with a meaningful portion of the recovery in digital currencies.”
Additionally, the remuneration plan says the recovery of claims for Gemini Earn users would be projected at “approximately 95–110%” without any contribution from Gemini.
The firm states in the filing that:
“If Gemini were to agree to provide $100 million to Gemini Earn users under the Proposed Agreement, as it previously did, there would be little doubt Gemini Earn users would receive more than full recovery.”
Gemini Earn was a service implemented by the cryptocurrency exchange Gemini with financing from Genesis. Users were then affected by Genesis’ bankruptcy protection filing and withdrawal freeze.
Genesis’ initial bankruptcy filing occurred in January 2023, after the withdrawal suspension which was a domino effect of a massive liquidity crisis in November 2022. Reportedly, the company owed over $3.5 billion to its top creditors, which includes Gemini.
This is the second agreement in principle submitted in the case. The previous proposal from DCG filed on Aug. 29 offered DCG equity.
Related: Gemini files brief in lawsuit against SEC, requests to keep it simple
A day after the first proposal was submitted, Genesis lenders called the agreement ‘wholly insufficient’ in an update.
The lenders claimed that the debtors, along with Genesis’ unsecured creditors are “unwilling to comply with their fiduciary obligations” to maximize creditor recoveries.
A week later, Genesis opened a lawsuit against its parent company DCG and its other affiliate DCG Investments on Sept. 6 for defaulted loans worth around $600 million.
On Sept. 5 Genesis Global Trading announced that it plans to eliminate its crypto spot trading service starting from Sept. 18.
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Sourced from cointelegraph.com.
Written by Savannah Fortis on 2023-09-13 12:50:26.
