On February 6th, 2023, Genesis announced that it had reached an agreement with its parent company DCG and creditors that would “maximize value” for all Genesis clients and stakeholders. This comes after the crypto lender filed for Chapter 11 bankruptcy in January and laid off almost a third of its staff. The agreement includes DCG exchanging its existing $1.1 billion note due in 2032 for convertible preferred stock to be issued by DCG as part of Genesis’s Chapter 11 plan, as well as refinancing its existing 2023 term loans. Additionally, DCG will contribute its equity interest in Genesis Global Trading (GGT) to Genesis Global Holdco, bringing all Genesis entities under the same holding company.
Gemini also made an arrangement with Genesis and other creditors with “a plan that provides a path for Earn users to recover their assets”. As part of the plan, Gemini has agreed to contribute up to $100 million in additional funds to Earn users. Gemini had previously loaned funds to Genesis and had as much as $900 million in customer deposits locked with the crypto lender.
Paul Aronzon, a member of Genesis’s board of directors, commented that the agreement is “a positive step forward and provides a clear path to a consensual resolution that maximizes value”. Genesis Global Capital reportedly owes at least $3.4 billion to no less than 100,000 creditors. The restructuring efforts are being spearheaded by a special committee of Genesis’s board of directors.
The agreement is a major step forward for Genesis and its stakeholders, as it will provide a path for Earn users to recover their assets, as well as maximize value for all Genesis clients and stakeholders. It is unclear when the agreement will be finalized, but it is an encouraging sign for the future of Genesis.