Genesis Bankruptcy Deadline Looms as Gemini Pushes for Resolution

Genesis Faces Bankruptcy Pressure

Time is running out for Genesis, the crypto lending unit owned by Digital Currency Group (DCG), to finalize a restructuring plan. After filing for bankruptcy in January due to the collapse of key counterparties like FTX, Genesis has struggled to reach an agreement with its creditors, who are owed over $3 billion.

Gemini's Ultimatum

Gemini, Genesis' largest creditor, is spearheading the pressure. Founded by the Winklevoss twins, Gemini seeks to recover over $1.1 billion. Cameron Winklevoss issued a firm deadline to DCG, demanding a decision by July 6. Failure to comply will result in litigation against DCG and its CEO, Barry Silbert.

Mediation and Proposed Terms

Efforts to mediate a restructuring plan have faltered, with a court-appointed mediator failing to secure an agreement by the recent deadline. Winklevoss proposed a restructuring deal involving a $275 million forbearance payment, alongside debt tranches of $355 million and $835 million due in two and five years, respectively. This proposal allows DCG to retain proceeds from the potential sale of Genesis' lending unit.

Potential Legal Consequences

Should DCG reject the proposal, Gemini intends to pursue litigation, aiming to place DCG in default and demand immediate repayment of debts. The situation highlights the intense conflicts among major figures in the crypto industry, as stakeholders closely monitor developments.

DCG's Broader Influence

DCG, based in Connecticut, holds a significant portfolio with over 200 companies in more than 35 countries. Its subsidiaries include Grayscale, a prominent crypto asset manager, and CoinDesk, a crypto news platform. The outcome of this dispute could have far-reaching implications across the crypto landscape.