Genesis Creditors to Expect 80% Recovery Under Proposed Restructuring Plan

After court clearance, Digital Currency Group (DCG) will sell its stock holding in Genesis’ trading business to Genesis Global.

A Genesis creditor says Genesis, Digital Currency Group, and creditors’ new restructuring plan will return at least 80% of creditors’ cash.

Genesis Global signed a “agreement in principle” with Digital Currency Group (DCG) and its creditors on Feb. 6 to sell its crypto trading and market-making business as part of restructuring.

DCG would provide Genesis Global Holdco its stake in Genesis Global Trading, Genesis’ brokerage affiliate.

Genesis-related firms would join a holding corporation.

DCG will exchange a $1.1 billion promissory note due in 2032 for convertible preferred shares. Refinancing its $526 million 2023 term loans will pay creditors.

Gemini will also provide $100 million to Gemini Earn users whose monies are frozen with the insolvent corporation.

Genesis will sell Genesis Global Trading when these transactions are approved by the court.

Genesis creditors’ recovery rate is “approximately $0.80 every dollar deposited, with a route to $1.00,” according to Donut’s Feb. 6 user update.

The “equity note, realized liquidation prices and incorporates the unknown expenditures connected with the remainder of this bankruptcy” determine the recoverable amount.

Genesis is reorganizing under Chapter 11 bankruptcy after FTX’s insolvency caused a liquidity issue in November.

Genesis Global Holdco said Genesis Global Trading will “maintain client trading operations” in its Chapter 11 petition, but the business was not listed.

Genesis attorneys stated during a January bankruptcy court that the business wanted a rapid creditor dispute settlement and expected to emerge from Chapter 11 by late May.