- Gemini has allegedly concocted a plan to get more money out of Digital Currency Group, involving additional creditors
- The exchange supposedly believes it can get as much as $2.8 billion out of DCG by soliciting investment from other creditors
- Genesis and DCG have been at loggerheads since the start of the year
Cryptocurrency exchange Gemini is trying to extract more funds from Digital Currency Group (DCG), the parent company of Genesis Global Capital, by involving more creditors. The Information reported on Friday that Gemini’s proposal involves select creditors contributing capital to expedite repayments in return for a larger share of potential recoveries through legal action against DCG. Under its plan, Gemini believes that with extra creditors on board it could potentially recoup up to $2.8 billion from Genesis.
Gemini Hoping to Wring DCG Dry
Genesis filed for bankruptcy in January with outstanding debts of at least $3.4 billion, and in February, it reached a preliminary agreement on a restructuring plan, supported by DCG and its primary creditors, including Gemini.
However, The Information cites two sources familiar with the situation as saying that Gemini has identified a way to turn the screw on DCG, whose CEO, Barry Silbert, has been involved in a very public dispute with Gemini co-founders the Winklevoss twins since the start of the year.
Gemini’s plan comes amid a legal battle between itself and DCG, with the former claiming that Genesis owes it over one billion dollars and alleges misconduct by DCG and Silbert in relation to Genesis’ bankruptcy. The lawsuit contends that Silbert concealed Genesis’ insolvency and encouraged Gemini to proceed with the Gemini Earn program, which subsequently faced issues due to Genesis’ financial situation.
Genesis and DCG Have Come to Agreement
Last week Genesis and DCG reached an in-principle agreement with Genesis’ creditors to address claims arising from the crypto lender’s bankruptcy. The proposed plan could lead to creditors recovering between 70% to 90% in U.S. dollar equivalent for unsecured claims and 65% to 90% recovery in-kind, depending on the nature of the digital assets involved, as stated in a filing.
Gemini spokespeople have yet to respond regarding its alleged plan to wring more funds out of DCG.
