Gemini Declares It Is ‘Woefully Light’

Gemini has challenged the recent Genesis bankruptcy plan presented by Digital Currency Group (DCG), asserting that it lacks clarity and is hard to comprehend due to the limited information provided.

“These cases must proceed towards a resolution. It has been more than nine months since the Debtors halted redemptions and denied Gemini Lenders access to their digital assets,” Gemini counsel further declared.

Frequent Delays in Genesis Bankruptcy Plan

In a court filing on August 30, Gemini disputed the bankruptcy plan proposed by DCG. The plan suggests a way for creditors of bankrupt crypto lender, Genesis, to receive payments. However, Gemini argues that the plan is not clear and lacks crucial information.

“The Debtors revealed an “agreement in principle” among the Debtors, the Committee, and DCG that is woefully light on specifics and remains subject to definitive documentation.”

The plan outlines that unsecured creditors might get 70% to 90% of their owed amount in USD. For in-kind recoveries, it could be 65% to 90%, depending on the asset allocation.

“The purported recoveries of “~70-90%” for unsecured creditors touted by the Debtors in connection with the “agreement in principle” are completely unsubstantiated and cannot be explained through the threadbare terms provided by the Debtors.”

Recently, the situation only worsened. Creditors haven’t received payments for loans that were meant to be paid after they reached maturity several months ago. “The harm to Gemini Lenders is compounded by the fact that has DCG not paid any of the approximately $630 million in loans that came due to the Debtors in May 2023,” the filing noted.

Gemini contends that despite frequent mentions of the plans, there is no substantial evidence to suggest its imminent execution. “Despite the Debtors’ repeated promises that a deal is very close, the Debtors are no closer to a confirmable plan that has creditor support today than they were when these cases were filed in January,” the filing states.

Genesis Has Been Going Downhill Since The Collapse Of A Major Crypto Exchange

Genesis encountered difficulties following the collapse of crypto exchange FTX in November 2022. Previous records indicated that the crypto lender owed roughly $3.5 billion to its primary 50 creditors.

On May 4, reports revealed that FTX creditors were seeking $4 billion from Genesis. They allege that Genesis took its assets out of FTX ahead of other creditors, before both filing for bankruptcy.

FTX further alleged that Genesis was “one of the main feeder funds to FTX and instrumental to its fraudulent business model.”

At the time, a Genesis spokesperson explained that it is actively working on the restructuring process. The spokesperson claimed Genesis wants to ensure the best possible outcome for its clients and stakeholders.