Gemini to put $100 million toward Genesis’ bankruptcy recovery plan

  • February 22, 2023

Crypto exchange gemini-to-contribute-100-million-to-genesis-bankruptcy-recovery-plan.html?&qsearchterm=gemini”Gemini will contribute $100 million in cash to a recovery plan for the bankrupt crypto lender Genesis Global Capital and its parent company, Digital Currency Group, the lender’s lawyers said in a court hearing Monday.

Gemini, founded by twins Cameron and Tyler Winklevoss, said it would keep aside the funds for users of its now-defunct Earn product. The 340,000 affected users had around $900 million of assets frozen when Genesis ceased withdrawals in November amid market volatility prompted by the bankruptcy of crypto exchange FTX. Genesis filed for bankruptcy last month.

“This plan is a critical step forward towards a substantial recovery of assets for all Genesis creditors,” Gemini told users in correspondence seen by CNBC. This shows “Gemini’s continued commitment to helping Earn users achieve a full recovery.”

The Winklevoss brothers had publicly blamed DCG’s Barry Silbert in the stranding of user funds. Gemini terminated Earn, a product that promised returns up to 8% on customer deposits, on Jan. 8. The Securities and Exchange Commission charged Genesis and Gemini with selling unregistered securities through Earn days later.

Gemini CEO Tyler Winklevoss, at the time, termed the SEC’s action “disappointing” and said it “does nothing to further our efforts and help Earn users get their assets back.”

The deal involving Genesis, DCG, Gemini, and all of Genesis’ creditors is aimed at refinancing the $500 million worth of cash and bitcoin that Genesis loaned to DCG to fund Silbert’s venture investments.

Genesis faced rough water since last July, when crypto hedge fund Three Arrows Capital defaulted on a $2.4 billion loan from the firm following the collapse of the Terra ecosystem. DCG issued a $1.1 billion promissory note to Genesis for 3AC’s collapse.

The Winklevoss twins criticized the move as “a complete gimmick that did

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Gemini to contribute $100 million to Genesis bankruptcy recovery plan

  • February 12, 2023

Cameron and Tyler Winklevoss.

Adam Jeffery | CNBC

Crypto exchange Gemini will contribute up to $100 million in cash, earmarked for its customers, as part of an agreement with bankrupt Genesis Global Capital and parent Digital Currency Group, Genesis’ lawyers said in a court hearing on Monday.

The restructuring deal and recovery plan were announced during a status conference for crypto lender Genesis, which filed for bankruptcy protection in New York on Jan. 19. Genesis owed its creditors, including Gemini and its users, billions of dollars.

Gemini, founded by Cameron and Tyler Winklevoss, had been engaged in a high-profile back-and-forth with Barry Silbert, who owns DCG. The Winklevoss twins have publicly blamed Silbert’s mismanagement of Genesis for issues with one of its own products called Earn, which promoted returns of up to 8% on customer deposits.

“This plan is a critical step forward towards a substantial recovery of assets for all Genesis creditors,” Gemini told its users in correspondence viewed by CNBC. It demonstrates “Gemini’s continued commitment to helping Earn users achieve a full recovery.”

The broader details of the restructuring plan were announced in Manhattan bankruptcy court. The deal, cut between Genesis, DCG, Gemini, and Genesis’ range of creditors, is largely predicated around a refinancing of Genesis’ loans to DCG. Genesis loaned over $500 million worth of cash and bitcoin to DCG, in part to fund founder Silbert’s venture investments.

DCG will also contribute to Genesis “all equity” in Genesis’ trading subsidiary, which remained operational during the bankruptcy. Additionally, DCG will provide a two-tranche debt facility, maturing in June 2024, with 11% interest on one tranche, and a 5% interest-paying bitcoin tranche, “roughly equal to around $500 million,” a Genesis lawyer said.

DCG will also issue convertible preferred stock to Genesis creditors.

DCG also extended a $1.1 billion

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