Agreed on business sale and debt consolidation
Cryptocurrency conglomerate Digital Currency Group (DCG) and its subsidiary Genesis have reached an agreement with a group of major creditors. CoinDesk reported, citing sources familiar with the matter.
Major agreements include the debt settlement of Genesis and the sale of the Genesis business.
In addition, DCG had borrowed approximately ?66 billion ($500 million) in cash and approximately ?13.2 billion ($100 million) worth of bitcoin (BTC) from Genesis as intercompany loans. Refinancing is also expected.
Genesis, which lent to 3 Arrows Capital (3AC), which filed for bankruptcy last year, is currently frozen. Parent company DCG has a debt of about 146 billion yen ($1.1 billion) to 3AC in the form of taking over that amount.
DCG had delivered a 10-year promissory note to Genesis on this bond. The reorganization of the DCG-Genesis loan is also planned to equitify this promissory note. It is not yet clear how this will be done.
connection: DCG, a major virtual currency with liquidity problems, explains points about the impact on the market
What is DCG
A major cryptocurrency conglomerate. It has 6 subsidiaries and invests in over 200 blockchain-related startups and over 50 cryptocurrency funds and projects. Major subsidiaries include investment company Grayscale, bitcoin mining company Foundry, Genesis Global Capital, and cryptocurrency media CoinDesk.
Customers of Gemini yield products are also creditors
The law firm for the creditor group has negotiated with Genesis and DCG on behalf of companies and individuals with claims totaling about ?320 billion (about $2.4 billion) against Genesis. The contents of this agreement will now be examined by each creditor.
Creditors include hundreds of thousands of users of the yield product Gemini Earn.
“Gemini Earn” is a yield service provided by major cryptocurrency exchange Gemini. The service used Genesis’ loan facility. For this reason, after Genesis suspended withdrawals due to the FTX bankruptcy in November last year, “Gemini Earn” was also forced to suspend the redemption of user funds.
Gemini co-founder Cameron Winklevoss wrote an open letter to the CEO of Genesis parent company DCG about this in January. He asked for DCG’s cooperation in repaying debts owed to Gemini customers.
Genesis then filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code. As a senior creditor, Gemini also has a claim of approximately ?100 billion ($766 million).
connection: Virtual currency lending company Genesis filed for bankruptcy, creditors such as Gemini and Van Eck
Chapter 11 of the U.S. Bankruptcy Code (Chapter 11)
A reconstruction-type bankruptcy legal system similar to the Civil Rehabilitation Law of Japan. The company will be restructured by reducing debts while continuing to operate. Debt collection will be suspended after the application, and the debtor will work on debt consolidation and formulate a reconstruction plan within 120 days in principle.
Gemini to contribute more than 10 billion yen
A lawyer for Genesis said on the 6th that Gemini will contribute about 13.2 billion yen ($100 million) in cash to rebuild Genesis. He says it’s part of the DCG and Genesis and Gemini agreements.
Gemini said in a statement to its users that this contribution was “an important step toward the recovery of assets for all Genesis creditors” and that “Gemini Earn users can do what Gemini Earn can do to fully recover their assets.” It shows the attitude of going forward.”
DCG and Genesis Agree with Creditor Group on Debt Consolidation, etc. appeared first on Our Bitcoin News.
