Genesis Reaches Restructuring Deal With Key Creditors

Summary of Genesis Restructuring Agreement

  • Genesis has reached a restructuring agreement with key creditors that involves the sale of Genesis Global Trading.
  • This deal includes two tranches, one denominated in U.S. dollars and another denominated in Bitcoin.
  • Gemini will contribute up to $100 million more for the recovery for Earn users who still do not have access to their funds.

Genesis Reaches Restructuring Agreement With Creditors

Genesis, a subsidiary of Digital Currency Group (DCG), has reached a restructuring agreement with key creditors according to statements by Cleary Gottlieb attorney Sean O’Neal, representing Genesis. The agreement would see the sale of Genesis Global Trading, amongst other moves designed to “maximize the recoveries to the estate.” It also involves restructurings of the debt DCG owes to Genesis Holdco, which was one of the legal entities that previously filed for Chapter 11 protection.

Terms Involved in Agreement

The terms involved in this agreement include a second lien term loan facility with a maturation date of June 2024 and two tranches – one dominated in U.S. dollars that will pay 11.5% interest and another denominated in bitcoin that will pay 5% interest. Additionally, DCG has agreed to issue a type of convertible preferred stock though specifics are still being determined.

Cause Of Action

The lending arm of Genesis was forced to halt withdrawals in November 2022 after suffering contagion from the collapse of crypto exchange FTX earlier that same month. As such, they filed for bankruptcy last month with their lawyers stating then that they anticipate reaching an agreement with creditors by the end of January 2023. This collapse also led to frozen withdrawals for Gemini Earn users who received yield through arrangements with Genesis’ lending arm.

Gemini’s Contributions To Recovery Efforts