The Digital Currency Group (DCG) has been facing financial turmoil for several months, mostly due to the liquidity crisis of one of its owned companies, Genesis. However, some creditors, particularly Gemini, believe that the CEO of DCG, Barry Silbert, is the main culprit. Gemini claims that DCG owes them north of $1.6 billion, which has caused problems for the exchange’s users due to Gemini’s Earn partnership with Genesis. Silbert refuted the claim, stating that DCG had fulfilled all outstanding payments, with the next loan maturity being in May. Despite this, the loan maturity has been reached, and according to Gemini, no payment has been made to Genesis.
Late last week, the loan of about $630 million from Genesis to DCG was not repaid, and in order to avert a default, which could send DCG into bankruptcy, Gemini, Genesis, and the committee of DCG creditors are considering a loan forbearance to prevent the issue from spiraling out of control. Any deal with DCG would be wholly dependent on whether the debtor intends to engage in good faith. Should a deal be impossible to reach, Genesis will plead for an amended plan of reorganization that would afford it a greater chance of paying back creditors. Gemini would be consulted on any proposal, although their approval is not guaranteed.
In the meantime, Gemini will file the Gemini Master Claim, formally requesting the immediate return of $1.1 billion worth of digital assets belonging to its users that Genesis had custody over as part of the Earn partnership between the two companies. This claim would be a separate proceeding from the case against DCG and its CEO, in particular, whom the Winklevoss twins have repeatedly accused of wrongdoing.
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About the author - J-S Tremblay
I've been involved in the cryptocurrency world since 2016 and trading since 2019. I started Moon and Lambo in 2021. I'm passionate about crypto and love to share my knowledge. I hate bankers and I hope that cryptocurrency will change the financial world for the better. View full profile...
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