DCG Misses $630 million Payment to Gemini Exchange

DCG missed paying its $630 million debt obligation to the Genesis bankruptcy estate last week, per a Gemini update.

Following catastrophic losses to the tune of $1.1 billion in 2022, partly due to the fraudulent collapse of FTX exchange, the conglomerate has been embroiled in bankruptcy proceedings for Genesis, its subsidiary, in 2023. Genesis filed for Chapter 11 bankruptcy amid allegations of commingling of funds and ongoing repayment disputes. Meanwhile, Gemini exchange CEO Cameron Winklevoss has threatened to sue DCG CEO Barry Silbert over the $900 million loan.

Concern about the conglomerate’s default risk on its debt obligations have been omnipresent. On Friday 19, crypto exchange Gemini, which is also a Genesis creditor, confirmed that DCG missed a $630 million payment that was due in the week of May 9.

Genesis, Gemini and several creditor groups, including the Unsecured Creditor Committee (UCC), and the Ad Hoc Group of Creditors (AHG) are deliberating as to whether to provide DCG forbearance in order for the firm to avoid defaulting.

Gemini said:

Consideration will be based in part on whether the parties believe DCG will engage in good faith negotiations on a consensual deal.

Earlier this month, creditors agreed  to allow a 30-day mediation period with a court-appointed mediator after a “subset of creditors” walked away from a tentative reorganisation formed in February.

Reportedly, the UCC submitted revised terms after investigating intercompany loans between Genesis entities and DCG before the exchange halted withdrawals last year.

If a deal cannot be reached, Gemini plans to work with Genesis on terms of a new plan which could be advanced without DCG’s consent. Gemini intends to file claims for Genesis to return between $1.1 billion to 200,000 Earn users who had active loans as of Jan. 19.

Separately, DCG was part of a $100 million Series A funding round for Sam Altman’s dystopian Worldcoin project, which seeks to scan users’ iris’ in order to provide universal basic income for ‘verified humans’ using its ‘Worldcoin’ token, which Mr. Altman created out of thin air.

The funding round included Coinbase Ventures, fraudster Sam Bankman-Fried and LinkedIn co-founder Reid Hoffman.

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