On February 6th, Genesis announced, via press release, an agreement with Gemini and Digital Currency Group (DCG) for a "global resolution that will maximize value for all Genesis clients and stakeholders".
Genesis Global Capital, a subsidiary of Digital Currency Group, started this whole mess when they halted withdrawals in November 2022.
Gemini's Earn program was a process where the company loaned their own customers' crypto to Genesis, in exchange for interest rate yields up to 8%.
After Genesis halted withdrawals, Gemini was unable to get their customers' crypto back and now were owed $900 million by Genesis.
Eventually, Genesis filed for bankruptcy, in January, and began the process of maximizing assets.
The terms of this agreement are as follows:
- DCG will exchange it's current $1.1 billion note due in 2032 for convertible preferred stock.
- DCG will refinance its 2023 term loans "through a new, junior secured term loan in two tranches made payable to creditors in the aggregate total value of approximately $500 million".
- Gemini will contribute up to $100 million in additional funds to Earn users.
“I am grateful to the talented team at Genesis for their ongoing dedication and commitment to client service, and excited about working together to build Genesis for the future. I also want to express my deep appreciation to all of our clients for their continued patience and loyalty as we work through a resolution for our lending business.”
- Derar Islim, Interim CEO of Genesis
Gemini Co-Founder Cameron Winklevoss also took to Twitter to relay the news to hopeful Gemini customers.
Gemini's commitment of an extra $100 million towards making customers whole again is respectable in my opinion, even if they did cause this by loaning out crypto to a third party.
Hopefully this agreement gets Gemini a huge step closer to repaying all their customers.
Here is the beginning of the Twitter thread:
"This plan is a critical step forward towards a substantial recovery of assets for all Genesis creditors. We have been working around the clock since November 16, 2022 to reach this milestone. We greatly appreciate the support and patience of Earn users during this time. This has allowed us to maximize our efforts on your behalf. There is still much work to be done to complete this process, including further due diligence of Genesis financials and judicial approval of this plan, but we are confident that we now have a framework in place to execute on."
- Cameron Winklevoss, Co-Founder of Gemini
You can find out more about any updates regarding Gemini's Earn Program by following this link: https://www.gemini.com/earn
What is your thoughts to this news?
Do you think Gemini users will get all their crypto back?
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