Gemini Not Losing Hope Despite DCG’s Default, Here Are Its Next Moves

Gemini exchange is still exploring new initiatives to help recover the funds locked on Genesis, the subsidiary of the Digital Currency Group (DCG) whose lending business went bankrupt earlier this year. In its latest update, Gemini revealed that Genesis has defaulted in its scheduled repayment of the agreed $630 million that was due last week.

Recall that Genesis went bankrupt after locking withdrawals and depriving Gemini Earn customers access to their funds. Gemini tapped the platform as its trusted custodian for the Earn product prior to its bankruptcy.

Three key ways forward for Gemini

With the default, Gemini is now looking at other alternative plans to ensure it fights for the best interest of its customers following the huge funds it is owed by Genesis. In the update, the crypto trading platform said it is considering whether to provide a forbearance to DCG to avoid a DCG default in consultation with the Unsecured Creditors Committee (UCC) and the Ad Hoc Group of Creditors (AHG).

For this forbearance to take proper foothold, Gemini said the negotiations will be based solely on whether or not Genesis and DCG will engage in good negotiations for a consensual deal.

Additionally, Gemini said it will be exploring a move for an amended plan of reorganization should the forbearance deal fail. To make room for this, Gemini said it has “filed a motion with the Bankruptcy Court seeking to extend its period of exclusivity to propose such a plan.”

The crypto exchange also said it is working on its Gemini Master Plan, which will seek to compel Genesis to refund more than 232,000 of its users who had an active loan profile as of Jan. 19, 2023 in the sum of $1.1 billion. Despite the huge efforts being made by Gemini, the timeline for which the current brawl with Genesis and DCG will be resolved remains largely unclear.