As part of an agreement with insolvent Genesis Global Capital and parent firm Digital Currency Group, cryptocurrency exchange Gemini will provide up to $100 million in cash designated for its users, according to Genesis’ attorneys, who made the announcement during a court hearing on Monday.
The recovery plan and restructuring agreement were disclosed at a status conference for the crypto lender Genesis, which declared bankruptcy in New York on January 19. Genesis owed billions of dollars to its creditors, which included Gemini and its customers.
1/ Today, @Gemini reached an agreement in principle with Genesis Global Capital, LLC (Genesis), @DCGco, and other creditors on a plan that provides a path for Earn users to recover their assets. This agreement was announced in Bankruptcy Court today.
— Cameron Winklevoss (@cameron) February 6, 2023
Gemini co-founder Cameron Winklevoss tweeted that “Gemini will be contributing up to $100 million more for Earn users as part of the plan, further demonstrating Gemini’s continued commitment to helping Earn users achieve a full recovery.”
DCG will also refinance its current 2023 term loans in two tranches payable to creditors for a combined total of about $500 million and swap its current $1.1 billion note maturing in 2032 for convertible preferred stock.
The Gemini reward programme, which enables users to deposit their cryptocurrencies and obtain yields of between 0.45% and 8% interest, akin to a bank account, has been the subject of a public dispute between Gemini and Genesis — the latter being the former’s primary service partner in the past .
Genesis users and Winklevoss threatened legal action against Genesis and DCG founder Barry Silbert when the business stopped allowing withdrawals in November 2022. They demanded that Genesis present a plan for repaying the $900 million debt Gemini paid to the now-bankrupt Genesis Global.
