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Genesis’ lenders refuse to accept the restructuring proposal

Digital Currency Group, owner of bankrupt Genesis Capital, has butted heads with its creditors.

Some creditors of bankrupt Genesis Capital have withdrawn from an agreement to restructure the cryptocurrency lender, according to the Digital Currency Group (DCG).

The sale of Genesis was conceived

DCG, which owns CoinDesk and Grayscale, had hoped to sell Genesis to pay back at least $3.4 billion owed to creditors. The company had reached an agreement just two months earlier. It could have resulted in Genesis selling or handing over its shares to creditors. However, DCG said some creditors have now come forward with additional demands.

“Our understanding is that a subset of creditors has decided to move away from the previous agreement. We do not know if hundreds of thousands of individual creditors are aware of this development, but the latest maneuvering will lengthen court proceedings,” read the statement posted on the DCG official. Twitter.

“We will weigh any new demands against the concessions we made before,” she said.

Relations between Gemini and Genesis quickly soured after FTX’s fallout last year.

Genesis folds amid FTX fallout

The group of creditors represents companies and individuals who have claims of about $2.4 billion against the cryptocurrency lender. They will now pitch the proposed deal to other creditors, including customers of the Gemini Earn lending product.

The agreement includes the sale of the bankrupt Genesis entities and the refinancing of existing loans. Including the settlement of the 10-year promissory note that DCG provided to Genesis against the failed 3AC hedge fund claims.

Genesis’ lending arm froze withdrawals in November 2022 after the collapse of FTX. Then, Genesis’ lending companies filed for bankruptcy protection in December. The lender was one of the first large crypto institutions to fall into the FTX turmoil late last year.

DCG, or Digital Currency Group, is one of the largest conglomerates in the industry, owning more than 200 crypto companies. Reports in January indicated that the group was in financial difficulty. In February, DCG acknowledged that the group had lost more than $1.1 billion in 2022.

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