Genesis seeks 100-day extension for recovery plan as DCG misses $630M payment News ▸ US ▸ Gemini ▸ Bankruptcy
Genesis seeks 100-day extension for recovery plan as DCG misses $630M payment
Gemini said it was ready to work with Genesis to advance a restructuring plan without DCG's participation.
2 min read
Updated: May. 25, 2023 at 11:44 pm UTC
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Bankrupt crypto lender Genesis has filed a motion to extend the exclusivity period for its reorganization plan by 100 days.
Why Genesis sought an extension
In a May 19 court filing to the United States Bankruptcy Court for the Southern District of New
York, the bankrupt lender, said it needed the extension “to achieve a value-maximizing restructuring without the interruption of a competing plan.”
Genesis wrote that the size and complexity of its case was enough ground for the court to grant its request. According to the lender, its balance sheets showed billions of dollars in assets and liabilities that would be restructured.
Besides that, its operations in the digital assets industry mean its process is faced with an evolving regulatory regime that must be considered in its case.
The lender further highlighted that its request should be granted because it had made “good faith progress” towards exiting the bankruptcy and that the requested extension would “neither prejudice nor pressure creditors or any interested parties.”
Genesis will have until Aug. 27 to file a plan if the request is granted, while its exclusive solicitation period will be extended to Oct. 26.
Gemini says DCG missed a $630M payment.
Meanwhile, crypto exchange Gemini said the bankrupt lender’s parent company, Digital Currency Group (DCG), missed a $630 million payment that was due.
DCG was one of the victims of the market contagion that swept many crypto firms in 2022. The crypto conglomerate owes nearly $1.7 billion to its lending subsidiary, Genesis.
In a May 19 Earn update, Gemini said it was considering whether to provide forbearance to avoid a DCG default. The crypto exchange added that this move would be hinged on if “the parties believe DCG will engage in good faith negotiations on a consensual deal.”
In a situation where an agreement cannot be reached, Gemini said it would work “with Genesis to suggest terms for an amended plan of reorganization that could be advanced without DCG’s consensual participation.” The crypto firm noted that this prompted Genesis’s May 19 request to extend its exclusivity period.
Meanwhile, Gemini added that it is preparing a Master Claim to be filed on May 22, seeking the return of $1.1 billion worth of crypto assets for its 232,000 Earn users.
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Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Zaeem, an editor fascinated by business, finance, DeFi, and cryptocurrencies, holds a business and finance degree. His 14-year career in financial journalism spans sectors like banking, finance, insurance, and tech.
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Gemini
Gemini is a regulated digital asset exchange and custodian that allows customers to buy, sell, store, and stake digital assets in a regulated, secure, and compliant manner.
Genesis
Genesis is an institutional digital asset markets and a full-service digital currency prime brokerage providing a single point of access for select qualified individuals and global institutional investors.
Digital Currency Group
Digital Currency Group’s mission is to accelerate the development of a better financial system.
