The troubled crypto firm Genesis has reached an agreement with key creditors that would involve a sale of the crypto lending and trading arm of the company.
As part of the new agreement, Barry Silbert’s massive crypto conglomerate Digital Currency Group (DCG) will exchange its existing $1.1bn promissory note for convertible preferred stock that will be issued by DCG. Additionally, DCG would refinance existing 2023 term loans through a new term loan made payable to creditors worth approximately $500m.
The agreement further stated that DCG will “contribute its equity interest” in Genesis Global Trading to a holding company known as Genesis Global Holdco. This would bring all Genesis entities under the same umbrella, and effectively means that DCG would sell off the crypto lending and trading arm of Genesis.
According to Genesis, the agreement will “maximize value for all Genesis clients and stakeholders.”
Genesis filed for bankruptcy under Chapter 11 of the US Bankruptcy Code on January 19. In an announcement at the time, the company proposed a solution that would “enable the business to emerge under new ownership.”
The creditors involved in the new deal include DCG – the owner of Genesis – as well as an “ad hoc group of creditors” which combined represent more than $2bn in claims, a press release from Genesis said.
Winklevoss-owned exchange to contribute $100m
According to the press release, crypto exchange Gemini is also a part of the new agreement, and will contribute $100m to its Earn clients under the deal.
Gemini has used Genesis as its partner for the Earn, and users have been unable to withdraw funds deposited in their Earn accounts since Genesis suspended redemptions in mid-November last year.
According to Cameron Winklevoss, the deal means that Earn users will not recover their assets:
The issue over the Earn program led to a heated public debate between the Winklevoss twins, who own Gemini, and DCG-owner CEO Barry Silbert. Over the past few months, the conflict escalated to the point where Cameron Winklevoss even called for the DCG board to sack Silbert from his position:
This news is republished from another source. You can check the original article here.
Be the first to comment