DCG Fails to Make $630 Million Payment, Gemini Reports
Gemini collaborates with other creditors to offer forbearance to DCG, as the firm missed a payment intended for its bankrupt subsidiary.
Because Bitcoin
May 22, 2023
The Block has reported that Gemini, a cryptocurrency exchange, revealed in a client update on May 19 that Digital Currency Group (DCG) failed to make a $630 million payment to its subsidiary, Genesis Global Capital, as scheduled earlier this month. Gemini, a creditor to DCG's Genesis, is currently collaborating with other creditor groups to offer forbearance to DCG in order to prevent a default.
DCG, like many others affected by the credit crisis in the crypto industry in 2022, has been engaged in negotiations with Genesis Capital's creditors after the subsidiary filed for bankruptcy protection in January. Gemini, which provided customer funds to Genesis through its retail high-yield Earn program, has threatened to take legal action against Barry Silbert and DCG.
According to Gemini's recent update, Digital Currency Group's (DCG) subsidiary, Genesis, owes a total of $900 million to Gemini. The update also highlights that DCG faced the risk of default if a $630 million debt payment was not made to Genesis's bankruptcy estate by the beginning of May.
In the event that a deal cannot be reached with DCG, Gemini plans to collaborate with other creditors to propose terms for an amended reorganization plan that can move forward without DCG's consent. Gemini filed a motion with the bankruptcy court on May 19 to propose this alternative plan, which would not require DCG's approval.
DCG's latest update on May 9 states that the company is currently in discussions with capital providers regarding growth capital and refinancing its outstanding intercompany obligations with Genesis.
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