Gemini Accuses DCG and Genesis of Deceiving Creditors
Digital Currency Group (DCG) is edging towards a solution to reimburse the losses incurred by its subsidiary Genesis, but the company still faces skepticism from some of its creditors. Gemini, in particular, voices its objections by denouncing a dishonest strategy.
Last January, Genesis went bankrupt a few weeks after the troubles experienced by the American exchange FTX. After several months of discussions, a preliminary agreement was reached with Genesis’ debtors. According to the company, this agreement should enable the repayment of up to 90% of the sums owed by Genesis to its various creditors.
However, this plan is far from being unanimous among Genesis’ creditors. Gemini, to whom Genesis owes over $1.2 billion, believes that this strategy will not truly reimburse its program participants.
Gemini Accuses DCG and Genesis of Deceiving Creditors
DCG and Genesis’ plan fails to convince Gemini of its ability to genuinely reimburse its clients.
While DCG’s proposal would result in almost complete reimbursement over seven years to over 230,000 individual creditors who used Gemini’s lending program, the company does not believe in it.
Through its lawyers, the company has extensively expressed its arguments.
They explain that “DCG’s proposal will allow the company to pay prorated recoveries through below-market inadequate loans.”
The lawyers add that “receiving a fractional share of interest and principal payments over seven years from an incredibly risky counterparty is not at all the same as receiving the cash and digital assets owed today by Genesis to Gemini lenders.”
Furthermore, according to them, Gemini Earn users “would not receive anything close to the true value of the money owed to them.” They continue by considering that “DCG touts recovery rates that are a deceptive, if not outright misleading, mirage.”
Finally, Gemini accuses DCG of exhausting Genesis’ creditors “in hopes that they become desperate enough to accept a significant discount just to move on.”
