Bankrupt Crypto Lender Genesis to be Sold
In an effort to repay its creditors as much of the $3.5 billion owed, the owner of bankrupt crypto lender Genesis Global Capital is selling both it and sister firm, broker Genesis Global Trading.
Creditor Repayment
Although early estimations suggested creditors could receive up to 80% of their funds, this is unlikely to happen soon. Under a proposal agreed upon by Genesis parent company Digital Currency Group and the main creditor representative groups, the two Genesis companies will be consolidated under one holding company, Genesis Global Holdco, for eventual sale.
Equity Distribution
In the event that a suitable buyer cannot be found, 100% of the equity in the holding company will be distributed to creditors, minus a management incentive plan.
Restructuring of Promissory Note
The proposal also involves the restructuring of a $1.1 billion promissory note given by Digital Currency Group to Genesis in June, when the company first faced financial difficulties following the bankruptcy of crypto hedge fund Three Arrows Capital. This note, due in 2032, will be traded for stock in Digital Currency Group, and a $526 million loan owed to Genesis by Digital Currency Group will be converted into a $500 million payment to creditors.
Additional Contribution
Additionally, Gemini exchange announced that it will be adding $100 million to the pot for its customers, as part of the proposal presented in court on February 10th.