Gemini Opposes Genesis Bankruptcy Plan: ‘Woefully Light on Specifics’

Attorneys for crypto exchange Gemini argued that a proposed resolution for Genesis’ bankruptcy doesn’t have enough detail or provide any assurances for some if its largest debtors in a new filing Wednesday.

A set of ad hoc creditors, the Fair Deal Group, also filed an objection to the proposed plan on similar grounds, saying the proposed agreement would fail to secure all of the debts Genesis is owed and that Genesis has not demonstrated it would be able to “confirm a viable plan.”

“On August 29, 2023, the Debtors revealed an ‘agreement in principle’ among the Debtors, the Committee, and DCG [Digital Currency Group] that is woefully light on specifics and remains subject to definitive documentation,” the Gemini filing said. “The limited information provided by the Debtors makes clear that the proposed deal is also woefully light in economic consideration.”

Genesis, which shares a parent company with CoinDesk in DCG, filed for bankruptcy in January. In its Aug. 29 filing, attorneys for the bankrupt lender said unsecured creditors could receive up to 90% of the U.S. dollar equivalent of their holdings, though full details were not shared.

Wednesday’s filing follows another from a third group of creditors – the Ad Hoc Group of Genesis Lenders – who similarly argued that Digital Currency Group’s role is “wholly insufficient to satisfy even the uncontested loan amounts due,” that creditor group said.

The three parties all also called for an end to a special exclusivity period which allowed Genesis to negotiate terms for resolving its bankruptcy through mediations.

“Debtors have repeatedly promised that a plan that resolves claims against DCG is right around the corner, as they seek extension after extension of mediation periods, hearing dates, and bid deadline,” the Gemini filing said. The harm to Gemini is worsened by the fact, it said, that DCG has “not paid any of the approximately $630 million in loans that came due to the Debtors in May 2023.”

Spokespeople for Genesis did not immediately return a request for comment.