The plan will see the sale of Genesis along with other steps in the deal with DCG and Gemini Trust Co.
Genesis, a subsidiary of Digital Currency Group, has reached a restructuring agreement with major creditors according to a statement from Cleary Gottlieb attorney Sean O’Neal, who represents Genesis. It will see the sale of Genesis Global Trading, among other moves designed to “optimize the recovery to the estate.”
Also included in the deal will be debt restructurings that Digital Currency Group, which owns Genesis and entities, owed to Genesis Holdco, which is one of the legal entities that previously filed for Chapter 11 protection. The terms include a second lien term loan facility with a maturity date of June 2024.
According to O’Neal, in the plan there will be two tranches, one dominated in US dollars that will pay 11.5% interest, and the other denominated in bitcoin that will pay 5% interest. O’Neal also explained that DCG has agreed to issue a type of convertible preferred stock, but the specifics of this issuance are still being determined.
The lending arm of Genesis was forced to stop withdrawing in November 2022 after contagion from the collapse of the crypto exchange FTX earlier the same month. The company filed for bankruptcy last month, with its lawyers saying they expect to reach a deal with creditors by the end of January 2023.
The collapse of Genesis also resulted in a withdrawal freeze for Gemini Earn users, who received proceeds through an arrangement with Genesis’ lending arm. Cameron Winklevoss, President of Gemini, previously expressed his displeasure with the situation through a letter posted on Twitter to address the issue. During today’s trial, he tweeted that Gemini will contribute up to $100 million more to the recovery for the users Get, who still do not have access to funds.