(Reuters) – Cryptocurrency exchange Gemini is attempting to garner support from other creditors in a bid to extract more funds from bankrupt crypto lending company Genesis’ parent company, Digital Currency Group (DCG), according to a report by The Information on Friday.
The proposed strategy involves certain creditors providing upfront funds to quickly repay others, in return for a larger portion of any money obtained through a lawsuit against DCG. The report outlines various options for creditors, estimating that they could recover up to $2.8 billion from Genesis.
DCG, Genesis, and Gemini have not yet responded to Reuters’ requests for comment. The Information’s report cites two individuals familiar with the matter.
In January, Genesis filed for bankruptcy, indicating debts of at least $3.4 billion owed to creditors. In February, an initial agreement on a restructuring plan, supported by DCG and primary creditors such as Gemini, was reached.
On Tuesday, Genesis and DCG reached a preliminary agreement with Genesis’ creditors to resolve the claims made during the bankruptcy proceedings of the cryptocurrency lender.
The proposed plan could result in unsecured creditors recovering 70%-90% of their claims in U.S. dollar equivalent, while recovery rates for in-kind assets would range from 65% to 90%, depending on the denomination of the digital assets, according to a filing.
(Reporting by Kanjyik Ghosh in Bengaluru; Editing by Sandra Maler and Gerry Doyle)
Credit: The Star : Tech Feed
