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Gemini Says Genesis Parent DCG Missed $630 Million Payment
Gemini says it is working with Genesis, DCG, and creditors to provide forbearance to DCG in order to avoid a default.
Updated May 22, 2023, 2:23 p.m. Published May 22, 2023, 5:44 a.m.
Digital Currency Group (DCG) missed a $630 million payment owed to Genesis last week.
Gemini CEO Cameron Winklevoss has threatened to sue DCG CEO Barry Silbert and DCG over the repayment of a $900 million loan after Genesis, a DCG entity, filed for Chapter 11 bankruptcy, amid allegations of mixed funds and ongoing disputes about loan repayments. The U.S. Securities and Exchange Commission (SEC) has accused both firms of selling unregistered securities through their Earn program.
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Both Genesis and CoinDesk are owned by DCG.
While Gemini and DCG are in discussions, if no deal is reached, Gemini and other parties are proposing an amended reorganization plan with Genesis that doesn't require DCG's approval, Gemini said in an update on its site.
“Consideration will be based in part on whether the parties believe DCG will engage in good faith negotiations on a consensual deal,” Gemini wrote.
“DCG continues to be engaged with the various stakeholders in the Genesis Capital restructuring process pursuant to the 30-day mediation period entered into by all parties on May 1,” a DCG spokesperson told CoinDesk.
Gemini co-founder Cameron Winklevoss has publicly accused DCG CEO Barry Silbert of engaging in “bad faith stall tactics.”
Meanwhile, Gemini is preparing to file a claim seeking the return of over $1.1 billion in digital assets from Genesis for its over 200,000 Earn users.
Late last week, lawyers for Genesis filed a request to the Bankruptcy Court of the Southern District of New York for an extension of their time allowed to file a Chapter 11 plan and solicit acceptances.
If the court approves this, they will have until August 27 to file a plan and until Oct. 26 for Gemini to accept it.
According to a January court filing, Genesis owes over $3.5 billion to its top 50 creditors including Gemini, Cumberland, Mirana, MoonAlpha Finance and VanEck’s New Finance Income Fund.
CORRECTION: (May 22, 06:01 UTC): Corrects that payment was owed to Genesis in first paragraph. An earlier version of this story named the creditor as Gemini.
UPDATE (May 22, 12:04 UTC): Updates with comment from DCG spokesperson.
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