Genesis Reaches Restructuring Deal: $100M More for Earn Users

Key Points

• Genesis has reached a restructuring agreement with key creditors.
• The plan involves the sale of Genesis Global Trading, debt restructurings and a second lien term loan facility.
• Gemini will contribute up to $100 million more for the recovery of Earn users.

Restructuring Agreement Reached

Genesis, a subsidiary of Digital Currency Group, has reached a restructuring agreement with key creditors according to statements by Cleary Gottlieb attorney Sean O’Neal. It would see the sale of Genesis Global Trading, amongst other moves designed to “maximize the recoveries to the estate.” Also included in the deal will be restructurings of the debt that Digital Currency Group owes to Genesis Holdco. This debt includes a second lien term loan facility with an expiration date in June 2024. The terms also include two tranches – one denominated in U.S. dollars paying 11.5% interest, and another denominated in bitcoin paying 5% interest – as well as DCG issuing convertible preferred stock.

Background

The lending arm of Genesis was forced to halt withdrawals in November 2022 after FTX collapsed earlier that same month. The company filed for bankruptcy last month, with its lawyers expecting a deal with creditors by the end of January 2023. This led to withdrawal freezes for Gemini Earn users who received yield through arrangements with Genesis’ lending arm. Cameron Winklevoss expressed his displeasure at this situation through a letter posted on Twitter addressing these issues.

Gemini’s Involvement

During today’s hearing, Winklevoss tweeted that Gemini will contribute up to $100 million more for the recovery for Earn users who still do not have access to their funds.

Conclusion

This agreement between Genesis and its creditors is expected to bring about positive outcomes for all parties involved – allowing creditors recoveries as well as providing relief for Earns users who remain unable to withdraw their funds from Gemini due to complications arising from FTX’s collapse last year and subsequent restructuring proceedings initiated by Genesis Global Trading since then .