Gemini, the Winklevoss twins-led crypto exchange, has entered a 30-day mediation process with Digital Currency Group (DCG) and creditor committees, hoping to reach a swift resolution on returning funds to customers.
On April 28, Gemini announced that all parties, including DCG, its bankrupt lending arm Genesis Global, the Unsecured Creditors Committee (UCC), the Creditor Committee, and Gemini itself, had agreed to initiate a 30-day mediation process. They aim for a final resolution as soon as possible, with an order from Bankruptcy Judge Lane expected to be entered as early as Monday.
Gemini Earn customers in limbo
Since late last year, approximately 340,000 Gemini Earn customers have been uncertain after DCG’s Genesis Global halted withdrawals in November. Genesis Global later filed for Chapter 11 bankruptcy, owing more than $3.5 billion to creditors. The largest claim came from Gemini Trust Company, with $766 million owed from funds lent through the Gemini Earn program.
In February, Gemini and DCG reached an agreement to restructure debts and contribute equity in Genesis Global Trading to its bankrupt lending arm, with Gemini contributing up to $100 million. However, unresolved details remain, and the UCC presented a revised term sheet to DCG on April 21 after an investigation.
The mediation process will concentrate on DCG’s economic contribution to the bankruptcy estate, benefiting all creditors, including Earn users. Two meetings are planned before May 8, and DCG owes Gemini $630 million, due between May 9 and May 11.
If DCG fails to pay or restructure its debt, it risks defaulting on its obligations. While the mediation process can last up to 30 days, all parties are expected to work quickly towards an agreement.