Digital Currency Group (DCG), the parent company of cryptocurrency firm Genesis Capital, has reported that there is no resolution of its “outstanding intercompany debt” that could help repay creditors.
In a May 9 announcement, DCG said it was entering a 30-day period of mediation with Genesis at the request of creditors. The company proposed a settlement plan in February, and Genesis creditors are expected to get back 80% of their money after the The company filed for Chapter 11 bankruptcy protection.
In April, however, Genesis creditors filed demands that disrupted the bankruptcy proceedings and an "agreement in principle" between the two companies. Genesis reported that it had between $1 billion and $10 billion in liabilities when it filed for bankruptcy. "On a par allel path , to provide further financial flexibility, DCG is in discussions with capital providers for growth capital and to refinance its outstanding intercompany debt with Genesis," DCG said. reach a fair outcome and look forward to a productive resolution during this mediation period." Following the Genesis bankruptcy, the struggling cryptocurrency firm has often been at the center of legal troubles between DCG and cryptocurrency exchange Gemini.DCG and Genesis reportedly owe Gemini's clients roughly $900 million with their Earn funds locked up Genesis partnered with Gemini to run the project. In January, Gemini co-founder Cameron Winklevoss threatened to sue DCG and CEO Barry Silbert if they failed to provide a “fair deal” to Gemini creditors.
US authorities have also taken action amid the financial distress of these businesses. In January, the SEC charged Genesis and Gemini with offering unregistered securities, and the New York State Department of Financial Services is also reportedly investigating Gemini's Earn scheme.
The 30-day meditation period gives DCG and Genesis until the end of May to reach a resolution on the proposed restructuring plan. In its original Chapter 11 filing, Genesis said it planned to auction off its assets on May 19 and exit bankruptcy proceededings.
