Gemini tries to line up other creditors in new Genesis bankruptcy plan

September 4, 2023

By Kanjyik Ghosh

(Reuters) – Cryptocurrency exchange Gemini is trying to rally other creditors behind a plan to wring more money out of bankrupt crypto lending firm Genesis’ parent company, Digital Currency Group (DCG), The Information reported on Friday.

The new proposal would involve some creditors’ fronting funds to help pay others back quickly in exchange for a bigger share of any money won by suing DCG, and maps out a range of options for creditors, estimating they could recoup up to $2.8 billion from Genesis.

DCG, Genesis and Gemini did not immediately respond to Reuters requests for comment. The Information cited two people familiar with the matter in its reporting.

Genesis filed for bankruptcy in January owing at least $3.4 billion to creditors and reached an agreement in principle on a restructuring plan, supported by DCG, and its primary creditors, including Gemini, in February.

Gemini tries to line up other creditors in new Genesis bankruptcy plan — A man walks past the logo of Gemini Trust, a digital currency exchange and custodian, during the Bitcoin Conference 2022 in Miami Beach, Florida, U.S. April 6, 2022. REUTERS/Marco Bello

Genesis and DCG on Tuesday reached an in-principle agreement with Genesis’ creditors to resolve claims brought during the crypto lender’s bankruptcy.

The plan could lead to a recovery of 70%-90% in U.S. dollar equivalent for unsecured creditors and 65%-90% recovery on an in-kind basis depending on the denomination of the digital assets, a filing revealed.