DCG, the parent company of Genesis, a crypto lender, has reportedly failed to meet its $630 million debt obligation to Gemini, according to a recent update. It was anticipated that DCG might default on the loan, which is now managed by Genesis’ bankruptcy estate.
Gemini had given DCG 30 days to secure the funds as part of a mediation process. The crypto exchange, led by the Winklevoss twins, accused Genesis of being responsible for the collapse of its interest-bearing lending product, Gemini Earn, which led to its closure in January. Genesis had allegedly failed to return over $900 million in assets owed to Gemini.
DCG, a New York venture capital firm founded by Barry Silbert, has been a supporter of numerous industry-related projects at the seed stage. Genesis, once a key pillar alongside investment unit Grayscale, bitcoin miner Foundry, media outlet CoinDesk, and crypto exchange Luno, filed for bankruptcy in January. Layoffs have affected several DCG companies, including DCG itself, over the past year.
Gemini has stated that it does not require DCG’s involvement in restructuring Genesis. The decision regarding whether to grant DCG more time to avoid potential default will depend on DCG’s perceived commitment to fair and open negotiations, as stated by Gemini.
If a deal cannot be reached to recover the $630 million from DCG, Gemini and other parties involved will proceed with a Genesis reorganization plan, potentially without DCG’s participation.
Gemini has also revealed that it plans to file a master claim on Monday, aiming to recover over $1.1 billion in cryptocurrency belonging to 230,000 users of Gemini Earn from Genesis.
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