Ever since the demise of the FTX exchange, several cryptocurrency firms have lost their financial reputation. Many firms ended up going bankrupt as they faced major financial losses for trusting FTX.
Things have not been the same for Genesis, which is a firm backed and operated by the Digital Currency Group (DCG).
Genesis was also connected with the FTX exchange and had a lot of funds stored in the (now) defunct crypto exchange.
As the FTX exchange went bankrupt, the financial losses for Genesis became too hard to handle. Therefore, the only choice Genesis had was to proceed with filing bankruptcy as well.
The first course of action for Genesis was to file for Chapter 11 bankruptcy and seek protection from the creditors. However, the DCG is determined to deal with the situation in the most professional manner.
New Restructuring Plan
As the company filed for Chapter 11 bankruptcy, they also revealed that they want to work on the restructuring of the company.
According to the company officials, they want to deal with the financial losses of the creditors and want to return their funds as fast as they can.
The DCG has, therefore, proposed a restructuring plan that would see the company return 80% of the funds belonging to the creditors.
This is a huge deal and claims coming from the DCG as it will be the only crypto firm that will be able to return so much to the respective creditors.
This does not mean that the 80% return is all the company is aiming for. They want to return the funds to the creditors in their entirety but they want to proceed with returning 80% of them.
It would allow the company to regain the trust of the creditors and allow them more time to work on returning the rest of the funds.
The announcement by Genesis Global
It was on February 6 when Genesis Global officials made an announcement pertaining to their fund’s recovery plan.
According to the company officials, they have reached an agreement that has been penned into principle with the creditors.
As part of the restructuring plan, Genesis Global will be sold off, which is the crypto market-making and trading arm of the DCG.
The selling of Genesis Global will be part of the restructuring efforts and return the funds to the creditors. The main goal is the recovery for the creditors and the DCG is going to go to great lengths to make it happen.
Despite selling the Genesis Global brand, the company aims to hold some of the equity in Genesis Global Holdco. It is the entity that is responsible for holding Genesis.
The company will be selling it with hopes of someday acquiring more equity in the firm and gaining majority ownership.
As the company sells Genesis Global, it will also see the DCG exchanging the promissory note that currently exists for $1.1 billion.
The particular note was due in 2032 and it was to be converted into the preferred stock. Then comes the 2023 term loans that the company aims to refinance.
The aggregated value of the loan is $526 million and once the refinancing is done, the funds will become eligible for payment to the creditors.
Gemini to Contribute with $100 Million
The DCG has even brought Gemini into the agreement. As part of the agreement, the Gemini platform will be providing $100 million that will be given to the users.
These users were interacting with the Gemini Earn platform through the Genesis Group. These users also had their funds frozen at the Genesis Group just as the firm went bankrupt.
Once all of the above transactions are made, the DCG will then proceed with the sale of Genesis Global Trading. However, the sale of the platform is subject to approval from the court.