Gemini intends to submit a fresh move to the court asking for the recovery of $1.1 billion in digital assets from Genesis, which is held by DCG.
A forbearance option against Digital Currency Group (DCG), a problematic cryptocurrency exchange, is apparently being considered by Gemini as a result of DCG’s failure to fulfill a $630 million repayment. Gemini could temporarily lower or delay mortgage payments through forbearance, but the borrower would still be responsible to make the lower or paused payments in the future.
Gemini noted that DCG’s willingness to participate in sincere negotiations for a mutually agreeable outcome will determine its decision on forbearance. If an agreement cannot be reached, Gemini intends to work with Genesis Capital, which is controlled by DCG, to put up terms for a revised plan of reorganization without DCG’s involvement.
Genesis Capital submitted a request on May 19th asking for an extension of the time frame during which it has the sole right to submit a reorganization plan to the bankruptcy court.
Genesis files bankruptcy
Genesis filed for Chapter 11 bankruptcy in January, which is what led to the reimbursement disagreement between Gemini and DCG. Regarding a $900 million debt repayment, Gemini co-founder Cameron Winklevoss threatened legal action against DCG and its CEO Barry Silbert in February.
The fact that Gemini is thinking about forbearance and that conversations are still going on shows how difficult it is for bitcoin exchanges to manage their debts and find a way out of bankruptcy. The result will have a big impact on the repayment’s future and the relationship between the parties involved.
Genesis owes its top 50 creditors, which include Gemini, Cumberland, Mirana, MoonAlpha Finance, and VanEck’s New Finance Income Fund, a total of more than $3.5 billion, according to a court document. From the beginning, the Genesis settlement process has been beset by controversy.