Benzinga - Cryptocurrency exchange Gemini, on Sunday, said that it will enter a mediation period with Genesis, a struggling crypto firm owned by Barry Silbert.
What Happened: The mediation process also involves Digital Currency Group, or DCG, Unsecured Creditors Committee and an ad-hoc Creditor Committee led by Gemini.
The agreement aims to resolve outstanding payments as soon as possible and benefit all creditors, including Gemini’s Earn users.
Bankruptcy Judge Sean Lane is expected to issue an order directing the mediation on Monday.
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DCG’s alleged inability to pay and/or restructure its debt may lead to defaulting on its obligations as it faces a $630 million loan maturity, as per a blog statement by Gemini.
1/ Earn update: This past week, Genesis, Digital Currency Group (DCG), the Unsecured Creditors Committee (UCC), the Creditor Committee, and Gemini agreed to start a 30-day mediation process to drive to a final resolution as soon as possible.— Gemini (@Gemini) April 30, 2023
Gemini expressed its support for the mediation process, but also expressed frustration with the pace of progress in Genesis’ restructuring efforts.
Gemini allows users to buy cryptocurrencies like Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), etc.
Why It Matters: This comes as Gemini, on April 11, reportedly received a $100 million loan from its co-founders, Tyler Winklevoss and Cameron Winklevoss. The loan was made after Gemini failed to secure funding from outside investors.
The Winklevoss brothers set up the exchange back in 2015. Tyler Winklevoss currently serves as the CEO of the company, with Cameron serving as its president.
Gemini has been impacted by a series of events last year. In November 2022, the company halted withdrawals for its Earn product in collaboration with Genesis, after the collapse of the FTX cryptocurrency exchange. Eventually, the service was discontinued entirely and the process of returning funds to users is still ongoing.
Price Action: At the time of writing, BTC was trading at $28,488, down 2.99% in the last24 hours, according to Benzinga Pro.
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