Crypto exchange Gemini, led by the Winklevoss twins, is entering a 30-day mediation process with Digital Currency Group (DCG) and creditor committees, aiming for a swift resolution regarding the return of funds to customers.
Impacted Gemini Earn customers seek resolution
Around 340,000 Gemini Earn customers were affected by the bankruptcy of Genesis Global earlier this year, putting hundreds of millions of dollars at stake. Gemini Earn, the now-defunct yield-generating product, had users in limbo since late 2021 when DCG’s Genesis Global halted withdrawals and later filed for Chapter 11 bankruptcy with more than $3.5 billion owed to creditors.
The mediation process targets agreement on economic contributions
Gemini Trust Company had the largest claim, with $766 million owed from funds lent through the Gemini Earn program. In February, Gemini and DCG agreed on a debt restructuring plan and equity contribution in Genesis Global Trading to the bankrupt lending arm.
However, unresolved details remain, and the mediation process will focus on DCG’s economic contributions to the bankruptcy estate, benefiting all creditors, including Earn users.
Two meetings are scheduled before May 8 as part of the mediation process, with DCG owing $630 million to Gemini—due between May 9 and May 11. However, if DCG fails to pay or restructure its debt, it risks defaulting on its obligations. Although the mediation process allows for 30 days, the parties are expected to work towards an agreement quickly.