On a restructuring plan, Genesis and its creditors have come to an in-principle agreement.
On January 20, the DCG-owned crypto lender declared bankruptcy.
The cryptocurrency exchange Bitvavo, based in Amsterdam, has stated that it anticipates recovering 80% to 100% of the €280 million that Digital Currency Group owes it (DCG). The assumption, the exchange said in a statement issued on Tuesday, is based on a “in-principle agreement” whose specifics will be worked out in the upcoming weeks.
In addition, Bitvavo noted that it expects the refund for its clients’ assets to be paid in cash, digital assets, cash and convertible preferred equity notes in DCG. The Dutch crypto exchange’s fund has been held by DCG-owned crypto lender Genesis since last year.
The announcement comes a day after the bankrupt crypto lender Genesis, which is owned by DCG, reached an in-principle agreement with its creditors on a restructuring plan that would either culminate in its sale or transfer to its equity creditors.
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Genesis filed for bankruptcy in New York on January 20th. Its exposure to two significant crypto businesses that failed last year, including FTX’s abrupt fall in November, set off the action. The crypto lender tried to raise money last year but was unsuccessful.
Genesis is therefore thought to owe more than 100,000 creditors, including the cryptocurrency exchange Gemini, situated in New York. Over 340,000 Gemini Earn clients are owed $900 million by the DCG subsidiary.
To raise money, DCG sells its grayscale assets.
Finance Magnates stated that DCG has begun selling off Grayscale’s assets in a number of the investment vehicles it manages. To satisfy Genesis’ creditors, the assets of the subsidiary asset manager are being sold at a discount.
Other Genesis-related news includes an argument over how to pay off debt that Barry Silbert, the CEO of DCG, recently had with Cameron Winklevoss, one of the co-founders of Gemini. Three Gemini Earn customers filed a class action lawsuit against Genesis as a result of the development. Separately, the Securities and Exchange Commission (SEC) of the United States initiated charges against Gemini and Genesis for the sale of unregistered securities.
The current state of the larger cryptocurrency industry, which is still reeling from the failure of FTX and other projects last year, can be seen in Genesis’ fragile state. Investors’ faith in the bitcoin market has been damaged by the scenario.