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Digital Currency Group plans restructuring to pay creditors of bankrupt Genesis unit

Digital Currency Group (DCG), the parent company of bankrupt crypto broker Genesis Global Capital, plans to transfer shares in another unit, Genesis Global Trading, to Genesis Global Holdco and possibly sell the two companies to raise capital to to reimburse the creditors, according to to court filings on Friday. Genesis Global Capital and Genesis Global Holdco both filed for Chapter 11 bankruptcy protection from creditors last month.

See related article: Gemini agrees to put up US$100 million to win asset recovery efforts

Fast facts

  • “Genesis today moved closer to a resolution for our lending business that maximizes value for all customers and stakeholders,” Derar Islim, interim CEO of Genesis Global Trading, said in a statement. “We have filed with the court our previously announced tentative agreement with DCG and key groups of creditors.”
  • Genesis Global Capital was a lending partner to New York-based crypto exchange Gemini for the exchange’s Gemini Earn program, which allowed investors to lend their crypto-assets to Genesis for up to 8% interest.
  • Genesis halted customer withdrawals on this program in November 2022 following the collapse of Bahamas-based crypto exchange FTX in the same month.
  • The crypto brokerage filed for chapter 11 bankruptcy on January 20, with its aggregate liabilities as of the filing date between US$1 billion and US$10 billion to more than 100,000 creditors.
  • Last week, Gemini accepted to pay US$100 million for the recovery of Earn user assets as part of a master agreement with Genesis and DCG and others to place all entities under Genesis Global Holdco.
  • Genesis had an exposure of US$175 million to FTX on its trading account and was looking to raise $1 billion from investors to cover a liquidity crunch before suspending withdrawals and new lending in mid-November.

See related article: Digital Currency Group Crypto Brokerage Genesis Global Capital Files For Bankruptcy

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