DCG Missed Promised $630 Million Loan Repayment, Says Gemini
The Digital Currency Group (DCG) has been dealing with financial turmoil for several months now. Mostly, its financial issues are due to the liquidity crisis that one of its owned companies, Genesis, is facing.
Internal and External Disputes
Although the financial problems of the DCG Group primarily boil down to the predicament Genesis is in, some creditors – Gemini chief among them – believe the main culprit is the CEO of the DCG Group, Barry Silbert.
According to the Winklevoss twins, DCG currently owes Gemini north of $1.6 billion, a problem which has cascaded onto the exchange’s users due to Gemini’s Earn partnership with Genesis.
Silbert previously refuted the claim, stating that DCG had fulfilled all outstanding payments, with the next loan maturity being in May.
“DCG did not borrow $1.675 billion from Genesis. DCG has never missed an interest payment to Genesis and is current on all loans outstanding; the next loan maturity is May 2023. DCG delivered to Genesis and your advisors a proposal on December 29th and has not received any response.”
However, the loan maturity has now been reached. According to Gemini, no payment has been made to Genesis.
Creditors Looking for a Solution
Late last week, the loan of about $630 million from Genesis to DCG was not repaid. In order to avert a default – which could send DCG into bankruptcy – Gemini, Genesis, and the committee of DCG creditors are considering a loan forbearance to prevent the issue from spiraling out of control.
Any deal with DCG would be wholly dependent on whether the debtor intends to engage in good faith, according to the statement published by Gemini.
Should a deal be impossible to reach, Genesis will plead for an amended plan of reorganization that would afford it a greater chance of paying back creditors. Gemini would be consulted on any proposal, although their approval is not guaranteed.
In the meantime, Gemini will file the Gemini Master Claim, formally requesting the immediate return of $1.1 billion worth of digital assets belonging to its users that Genesis had custody over as part of the Earn partnership between the two companies.
This claim would be a separate proceeding from the case against DCG and its CEO, in particular, whom the Winklevoss twins have repeatedly accused of wrongdoing.
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