Digital Currency Group (DCG) appears to have avoided possible bankruptcy as its sister firms, and Genesis subsidiaries, have reached an agreement with creditors to avoid going under.
Digital Currency Group has come to an agreement in principle, according to a source known to Coindesk. The plan aims to restructure the company through the use of its main creditors.
The move looks to remove the Genesis loan book as well as include the sale of Genesis entities.
Furthermore, refinancing outstanding loans that involve borrowed funds is likely to occur. The source has stated that DCG borrowed $600 million in cash and Bitcoin from Genesis.
The move also looks to include the “ equitization of the infamous 10-year promissory note that DCG gave Genesis in return for failed hedge fund 3AC claims,” according to Coindesk.
Three Arrows Capital Contagion Continues
The crypto market collapse was fueled by the Chapter 15 bankruptcy filing by Three Arrows Capital (3AC), which once was considered one of the largest crypto hedge funds. Multiple firms have seen their invested assets turn to dust. The two-man firm had reportedly held over $10 billion in assets under management (AuM). The most recent company to be hit by bankruptcy is Genesis. The company is said to have a promissory note worth $1.1 billion to Three Arrows Capital.
Fortunately, thanks to creditors of the embattled firm, negotiations have been fruitful. The Creditor group has reportedly had successful negotiations which have seen claims totaling over $2.4 billion filed against Genesis.
DCG Set New Deal on the Table for Genesis
The new restructuring deal will see creditors, including those impacted through Gemini Earn. This comes after Gemini had threatened legal action against the firm for withholding over $900 million in Gemini Earn funds from over 300,000 users.
While details are still sketchy. It appears DCG and Genesis could finally come to a conclusion that could potentially appease its users as well as Gemini Earn users. Who has had its co-founder, Cameron Winklevoss continuously applying pressure to resolve the issue and come to a suitable agreement for Genesis and Gemini Earn users.
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