Barry Silbert’s Digital Currency Group is urging creditors of its bankrupt crypto lending subsidiary, Genesis Global Holdco LLC, to back a proposed repayment plan it said could fully repay hundreds of thousands of customers who invested money through Gemini Trust Co.’s Earn program.
(Bloomberg) — Barry Silbert’s Digital Currency Group is urging creditors of its bankrupt crypto lending subsidiary, Genesis Global Holdco LLC, to back a proposed repayment plan it said could fully repay hundreds of thousands of customers who invested money through Gemini Trust Co.’s Earn program.
DCG said in a Wednesday court filing that Gemini Earn users could get 100 cents on the dollar under Genesis’ proposed restructuring plan, or potentially even higher returns, and would be partially repaid through Bitcoin and Ether. Other Genesis unsecured creditors could recover between 70% or 90% under the plan, far higher than customers of other bankrupt crypto platforms like Voyager Digital and BlockFi Inc. are projected to get under court-approved liquidation plans, DCG said.
Wednesday’s statement comes as DCG attempts to win-over Earn users and other Genesis creditors and build support for a restructuring plan that has been criticized by Gemini. Earlier this month, Gemini said “there is absolutely no evidence” the restructuring plan would repay Earn users between 70% and 90% and said the proposal backed by DCG has virtually no support among Genesis’s creditors.
DCG said the interests of Gemini and its founders Tyler Winklevoss and Cameron Winklevoss don’t align with Earn users and accused other creditor groups of pushing “a false narrative in the hopes of exacting additional value from DCG far and above what it actually owes the Debtors.”
Genesis and Gemini collaborated on the Earn program, which let Gemini clients collect around 8% interest on their digital-asset holdings. The program has since been the target of a US Securities and Exchange Commission lawsuit that alleges the program amounted to an offering of unregistered securities, which Genesis and Gemini have denied.
The bankruptcy is Genesis Global Holdco, LLC, 23-10063, US Bankruptcy Court, Southern District of New York (Manhattan)
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