Digital Currency Group Misses $630 Million Payment to Genesis

Digital Currency Group Misses $630 Million Payment to Genesis

Digital Currency Group (DCG) faced a setback when it failed to make a $630 million payment owed to Genesis last week. This payment failure has led to a legal dispute between DCG CEO Barry Silbert and Gemini CEO Cameron Winklevoss. The conflict revolves around a $900 million loan that Genesis, a DCG entity, failed to repay after filing for Chapter 11 bankruptcy. The U.S. Securities and Exchange Commission (SEC) has also accused both companies of selling unregistered securities through their Earn program, adding to the complications.

In response to the payment dispute, Gemini has threatened legal action against DCG and Silbert. While discussions between Gemini and DCG are ongoing, Gemini has suggested an alternative reorganization plan with Genesis that doesn't require DCG's approval. The viability of this plan will depend on whether DCG engages in good faith negotiations. DCG has stated that it remains engaged with stakeholders in the Genesis Capital restructuring process during the 30-day mediation period, which commenced on May 1. Gemini, on the other hand, is preparing to file a claim seeking the return of over $1.1 billion in digital assets from Genesis, meant for its extensive base of over 200,000 Earn users.

Legal proceedings continue as Genesis has requested an extension from the Bankruptcy Court to file a Chapter 11 plan and solicit acceptances from creditors. If approved, Genesis will have until August 27 to submit the plan, with Gemini having until October 26 to accept it. The January court filing revealed that Genesis owes more than $3.5 billion to its top 50 creditors, including Gemini, Cumberland, Mirana, MoonAlpha Finance, and VanEck’s New Finance Income Fund.