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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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