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

article-image

rafapress/Shutterstock modified by Blockworks

share

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.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research Report Templates.png

Research

ZKPs enable efficient offchain transaction processing and validation, resulting in increased throughput and reduced fees. Solana's ZK Compression leverages ZKPs to minimize onchain storage costs, while Sui's zkLogin streamlines user onboarding by replacing complex key management with familiar OAuth credentials.

article-image

Plus, is Polymarket this cycle’s breakthrough mainstream app?

article-image

The crypto asset manager lowered its planned fee from 0.25% to 0.15%, undercutting its competitors

article-image

Plus, a look at planned ETH ETF fees and how they differ from their BTC counterparts

article-image

North Korea suspected in breach of Indian exchange’s multisig wallet

article-image

Plus, Sanctum’s CLOUD token has officially launched — but not without problems

article-image

It’s not yet clear whether Donald Trump is pumping bitcoin. But an unofficial memecoin is still seeing benefit.