Following its high-profile bankruptcy three weeks ago, the lending arm of crypto institutional brokerage Genesis has reportedly agreed to an in-principle restructuring plan.
According to an anonymous source cited by coindeskThe deal includes the main creditors of Genesis as well as its parent company, Digital Currency Group, which is run by crypto billionaire Barry Silbert. Genesis reportedly owes these major creditors approximately $2.4 billion coindeskOf the roughly $3.4 billion in liabilities the company cited in its bankruptcy filing.
The transaction includes the sale of Genesis’ insolvent entities as well as the closure of the Genesis loan book. It also included a $100 million debt refinance in bitcoin and $500 million in cash that DCG borrowed from the struggling crypto brokerage.
The preliminary settlement is potentially a major step forward in resolving one of the most high-profile bankruptcies in the crypto industry over the past year.
When contacted, Genesis and DCG did not immediately respond for comment. Luck,
The cryptocurrency brokerage’s struggles have largely tracked with the onset of the so-called crypto winter, while Genesis’ Chapter 11 filing outlines the relationship between it and the industry’s other major players — many of whom are now bankrupt or in trouble. .
Three Arrows Capital, a crypto hedge fund, was one of the first large firms to move in 2022. It had taken a $2.36 billion loan from Genesis Asia Pacific Pte, one of Genesis’ subsidiaries. Ltd, which eventually also filed for bankruptcy.
Months later, now-defunct cryptocurrency exchange FTX and its associated crypto hedge fund Alameda Research collapsed. Genesis loaned Alameda millions of dollars wall street journal,
Genesis subsequently laid off 30% of its staff and its lending arm, Genesis Global Capital, suspended customer withdrawals. This brought the firm into direct conflict with Gemini, whose users had money tied up in Gemini Earn, a yield-yielding product in conjunction with Genesis.
Gemini founders, twins Cameron and Tyler Winklevoss, most famous for their role in founding Facebook, wrote an open letter to DCG’s Barry Silbert. They demanded that he return the $900 million worth of Gemini funds locked up in Genesis. Shortly thereafter, the SEC charged both companies with selling unregistered securities through Gemini Earn.
It was not clear whether Gemini was included in the initial settlement with Origin’s main creditors. Winklevoss’s company did not immediately respond to a request for comment when contacted. Luck,
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