According to Gemini, DCG failed to pay a debt owed by its insolvent subsidiary.
According to a May 19 update to customers issued by cryptocurrency exchange Gemini, Digital Currency Group failed to pay $630 million to its affiliate Genesis Global Capital earlier this month.
Gemini, which is a creditor of DCG’s Genesis and is led by Barry Silbert, has said that it is collaborating with Genesis and other creditor organisations to grant forbearance to DCG in an effort to prevent a default.
DCG, one of the many victims of the 2022 crypto credit crisis, has been in talks with Genesis Capital’s creditors since the company filed for bankruptcy protection in January. Genesis Capital was one of several victims of the disaster. Gemini has threatened to sue Silbert and DCG because it loaned funds to Genesis through its retail high-yield Earn program.
DCG’s Genesis owes Gemini a total of $900,000,000 USD. On May 1st, Gemini warned that DCG may go into default if a $630 million debt payment to Genesis’ bankruptcy estate was not completed.
If Gemini is unable to reach an agreement with DCG, the company says it would collaborate with other creditors “to suggest terms for an amended plan of reorganisation that could be advanced without DCG’s consensual participation.”
On May 19, Gemini submitted paperwork to the bankruptcy court proposing a reorganisation plan that would not need DCG’s consent.
The post also revealed that Gemini has been working on a claim to be submitted today, which would ask for the restoration of $1.1 billion in cryptocurrency on behalf of its 232,000 Earn members.
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