DCG Risks Defaulting on $630M in Debt Obligations, Gemini Says

Genesis has initiated a 30-day mediation process with DCG, UCC, Creditor Committee and Gemini to reach a final resolution as soon as possible


rafapress/Shutterstock modified by Blockworks


Digital Currency Group risks defaulting on its $630 million debt obligations to the Genesis bankruptcy estate, according to a statement released by Gemini on Friday.

Genesis said it has initiated a 30-day mediation process with Digital Currency Group (DCG), the Unsecured Creditors Committee (UCC), the Creditor Committee and Gemini to reach a final resolution as soon as possible.

The mediation is focused on DCG’s economic contribution to the bankruptcy estate for the “benefit of all creditors,” including Earn users — the exchange’s former lending program that halted operations in November.

Earn was eventually forced to close following DCG subsidiary Genesis Global Capital’s alleged failure to return more than $900 million in assets owed to it.

The proposed mediation provides for two meetings before May 8, an important date as DCG owes the Genesis bankruptcy estate $630 million on May 9 through to May 11.

If DCG is unable to pay or restructure its debt, the company risks defaulting on its obligations, Gemini said in its statement. Blockworks attempted to contact both DCG and Gemini but did not receive a reply by time of publication.

Gemini has also expressed its frustration with the pace of progress among the parties and the need for urgency, stating that they support the mediation process and look forward to working with the parties to bring this to a conclusion.

Both Gemini head Cameron Winklevoss and DCG boss Barry Silbert have engaged in a tit-for-tat since the year began.

According to Winklevoss, DCG owes Genesis $1.675 billion, which Silbert has allegedly been using to fund share buybacks, venture investments and Grayscale NAV trades that have significantly increased the Trust’s fee-generating assets under management.

Though Silbert has publicly denied those claims, stating his company has “never missed an interest payment to Genesis and is current on all loans outstanding.”

The next status conference with the court is scheduled for May 4 which will likely review the progress of the bankruptcy proceedings and hear updates from both parties.

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