- Gemini will consider forbearance if DCG holds good-faith negotiations
- Genesis owes its 50 main creditors $3.5B+
- According to the Gemini Master Claim, Genesis owes the exchange's users $1.1B+
After Digital Currency Group (DCG) missed a $630 million repayment to Gemini crypto exchange last week, the latter is considering forbearance, CoinTelegraph reported.
Forbearance is a term used to describe a temporary suspension or reduction in the payment of debts or obligations owed by an individual or organization. It is a financial arrangement between a borrower and a lender or creditor. During a forbearance period, the lender agrees to temporarily suspend or lower the borrower’s payments, allowing them to navigate through a period of financial hardship.
Consideration is based on consensus
Gemini will consider forbearance based on whether DCG goes through with good-faith negotiations on a consensual agreement. If the parties don’t reach an agreement, Gemini will work with Genesis Capital, which is owned by DCG, to suggest a new reorganization plan that excludes DCG.
Genesis asked a bankruptcy court to extend the deadline to propose this plan last week. The debt issue escalated after Genesis filed for Chapter 11 bankruptcy early this year.
Genesis owes creditors $3.5B
Court documents show that Genesis owes its main creditors more than $3.5 billion. They include Gemini, VanEck’s New Finance Income Fund, Cumberland, and MoonAlpha Finance.
Scandals from the start
The settlement process has been plagued by scandals from the start. DCG and Genesis concluded a principle-based agreement with creditors, and Genesis filed a full settlement to the court in February.
Creditors should have received 80% of the funds they had lost because of the bankruptcy. Several months later, Genesis creditors increased their demands, nullifying the initial agreement.
Gemini to file “Master Claim”
The exchange will file the new “Gemini Master Claim” it has prepared by the end of today. According to the new plan, Genesis owes Gemini users more than $1.1 billion in digital assets. Those users were clients of Gemini Earn, whose loans were active as of January 19 this year.
