- 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.
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.