Digital Currency Group (DCG) has reportedly missed a payment of $630 million that it owed to its subsidiary, Genesis Global Capital, causing concerns among investors. Gemini, a creditor to DCG's Genesis, is now collaborating with other creditor groups to offer forbearance to DCG in order to prevent a default situation.
DCG has been grappling with financial challenges since the credit crisis that affected the crypto industry in 2022. The company has been engaged in negotiations with creditors of Genesis Capital, which filed for bankruptcy protection in January. Gemini, which had lent customer funds to Genesis as part of its retail high-yield Earn program, has threatened legal action against DCG and its CEO, Barry Silbert.
The outstanding debt owed by DCG's Genesis to Gemini amounts to $900 million. In an earlier communication in May, Gemini had warned that DCG would be at risk of default if the $630 million debt payment was not made to Genesis's bankruptcy estate.
In its most recent update, Gemini stated that if an agreement cannot be reached, it will collaborate with Genesis to propose an amended plan of reorganization that doesn't require DCG's consent. Gemini has filed a motion with the bankruptcy court to present this alternative reorganization plan.
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