Last Updated on May 1, 2023 by Bitfinsider
Gemini, the cryptocurrency exchange operated by the Winklevoss twins, is expecting that mediation will result in a quick resolution to negotiations with Digital Currency Group over restoring customer monies.
In an April 28 update, Gemini stated that DCG, DCG’s bankrupt lending arm Genesis Global, the Unsecured Creditors Committee (UCC), the Creditor Committee, and Gemini had “agreed to start a 30-day mediation process to drive to a final resolution as soon as possible,” adding that “an order from Bankruptcy Judge Lane directing the mediation is expected to be entered as early as Monday.”
Some 340,000 customers of the now-defunct yield-generating product Gemini Earn have been stuck in limbo since late last year, when DCG’s Genesis Global halted withdrawals in November. Genesis Global later declared Chapter 11 bankruptcy, owing creditors more than $3.5 billion. Gemini Trust Company, which was due $766 million in assets leased out under the Gemini Earn program, has by far the largest claim.
In February, Gemini and DCG negotiated an agreement under which DCG would restructure debts and contribute ownership in Genesis Global Trading, another company, to its bankrupt lending arm, with Gemini contributing up to $100 million.
However, there are still some details to work out. Following an investigation, the UCC presented a revised term sheet to DCG on April 21.
The agreed-upon mediation, according to Gemini’s Friday update, “will be narrowly focused on DCG’s economic contribution to the bankruptcy estate for the benefit of all creditors, including Earn users, and is designed to bring resolution to the Genesis bankruptcy plan.”
Gemini stated that the mediation procedure will include two meetings before May 8, and that DCG owes Gemini $630 million by May 9-11. “DCG risks defaulting on its obligations if it is unable to pay and/or restructure its debt.” So, while the mediation is set to last up to 30 days, the parties are expected to reach an agreement as soon as possible,” Gemini said.
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