Digital Currency Group and Genesis subsidiaries have reached an initial agreement on a restructuring plan with a group of the firm’s main creditors, according to CoinDesk.
This comes after Genesis filed for bankruptcy protection last month after taking a financial hit following the collapses of crypto hedge fund Three Arrows Capital and exchange FTX last year.
The principal agreement includes winding down the Genesis loan book and also the sale of the bankrupt Genesis entities, according to a person familiar with the situation who spoke to CoinDesk.
A term sheet includes refinancing outstanding loans where Digital Currency Group borrowed $500 million in cash and about $100 million worth of bitcoin from Genesis. The agreement will be solicited to other creditors, including customers of the Gemini Earn lending product, CoinDesk reported, citing the person familiar with the matter.
That lending product has caught the eye of regulators. The Securities and Exchange Commission charged both Gemini and Genesis last month with the unregistered offering and sale of securities through the Gemini Earn program. That program, too, has been the subject of a public feud between Gemini co-founder Cameron Winklevoss and DCG head Barry Silbert.
Genesis Global Holdco owes more than $3.6 billion to its top 50 creditors, including claims from the Gemini Trust Company.
Genesis did not respond to CoinDesk. DCG is CoinDesk's parent company.
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