The Digital Currency Group (DCG) is currently facing financial turmoil, mainly due to the liquidity crisis of its owned company Genesis.
Internal and External Disputes
While Genesis is primarily responsible for the DCG Group’s financial problems, some creditors, including Gemini, believe that CEO Barry Silbert is the main culprit.
Gemini claims that DCG owes them over $1.6 billion, which has affected the exchange’s users due to Gemini’s partnership with Genesis.
Silbert denies this and claims that all outstanding payments have been fulfilled, with the next loan maturity due in May.
“DCG did not borrow $1.675 billion from Genesis. DCG has never missed an interest payment to Genesis and is current on all loans outstanding; the next loan maturity is May 2023. DCG delivered to Genesis and your advisors a proposal on December 29th and has not received any response.”
However, as the loan maturity date has arrived, Gemini states that no payment has been made to Genesis.
Creditors looking for a Solution
Last week, DCG was unable to repay the $630 million loan from Genesis. To avoid default and bankruptcy, Gemini, Genesis, and the committee of DCG creditors are considering a loan forbearance.
Any agreement with DCG will depend on whether the debtor agrees to engage in good faith, according to a statement from Gemini.
If a deal cannot be reached, Genesis will request an amended plan of reorganization to pay back creditors. Gemini will be consulted, but approval is not guaranteed.
Meanwhile, Gemini will file the Gemini Master Claim, requesting the immediate return of $1.1 billion worth of digital assets belonging to its users, which Genesis had custody over as part of their partnership.
This claim is separate from the case against DCG and its CEO, whom the Winklevoss twins have accused of wrongdoing.
