In a court filing on Friday, cryptocurrency exchange Gemini expressed strong disapproval of a bankruptcy recovery proposal for Genesis creditors. Gemini termed the potential deal as “at best, misleading.”
Earlier this week, Genesis and its parent company, Digital Currency Group (DCG), announced a deal where investors of Genesis’ Earn Program can recover up to 90% of their investment. The Earn program was offered to customers of the Gemini crypto exchange, but it relied on the financial infrastructure provided by Genesis, media reports said.
However, Gemini refuted these claims on Friday, asserting that Gemini Earn users would not come close to recovering the actual value of the money they are owed under the proposed plan.
In their court filing, Gemini’s legal team stated, “DCG presents recovery rates in a manner that is highly deceptive, at best, and potentially misleading, at worst. Let there be no misunderstanding: Gemini Lenders will not receive anything remotely close to the proposed recovery rates as outlined in the current ‘agreement in principle.'”
DCG owes Genesis, the struggling crypto lender, more than $1.65 billion, and Genesis, in turn, owes approximately $1.2 billion to Gemini. Genesis also has outstanding debts exceeding $3 billion to its top 50 creditors.
DCG’s proposed repayment plan divides the owed funds into two installments over a span of seven years, with the promise of ultimately making Gemini Earn users “nearly whole,” according to DCG’s legal representatives.
Additionally, Gemini’s lawyers raised broader concerns about DCG’s tactics, accusing them of attempting to “wear down” Genesis’ creditors in the hope of coercing them into accepting significant concessions simply to resolve the situation.
