DCG misses $630m payment to Gemini Earn

The Digital Currency Group (DCG, Genesis’ parent company) missed a $630 million payment as part of compensation to Gemini Earn users. This was reported by Cameron Winklevoss, co-founder of the trading platform.

DCG was scheduled to transfer the funds from May 9 to May 11.

The parties are currently considering the possibility of extending the debt to avoid a default. The decision hinges on whether the holding will continue to engage in good-faith negotiations on the agreed deal.

According to the statement, if the terms of the agreement are not met, Gemini will propose a restructuring plan that does not require DCG’s approval. Gemini has already filed the corresponding petition in court.

The crypto exchange has also filed a lawsuit seeking the immediate return of $1.1 billion to 232,000 affected Gemini Earn users.

Genesis owes more than $3.5 billion to its 50 largest creditors, including Gemini, Cumberland, Mirana, MoonAlpha Finance and New Finance Income Fund VanEck.

Earlier, DCG, Genesis, the creditors’ committee of the crypto lending platform, and Gemini agreed to launch a 30-day pre-litigation settlement process.

The parties are seeking an acceptable resolution to the February 2023 Genesis agreement with creditors, under which creditors would be able to recover 80% of the lost funds. The arrangements envisaged a gradual write-down of Genesis’s loan portfolio and the sale of insolvent structures.

Financial support for the group’s lending business was required after the June 2022 bankruptcy of the cryptocurrency Three Arrows Capital hedge fund.

On November 6, 2022, Genesis Global Capital suspended withdrawals and the issuance of new loans. The firm cited heightened client demands after the collapse of FTX.

In January 2023, Genesis Global Holdco and its subsidiary Genesis Asia Pacific and Genesis Global Capital filed for bankruptcy. Reports say their liabilities exceed $3 billion.

As noted, in May DCG founder Barry Silbert liquidated 120,000 shares ETCG Grayscale Investments, the subsidiary of the holding company led by him, worth $755,295.