Winklevoss twins' crypto exchange Gemini to contribute $100 million to Genesis bankruptcy recovery

Crypto speech Gemini volition lend up to $100 cardinal successful cash, earmarked for its customers, arsenic portion of an statement with bankrupt Genesis Global Capital and genitor Digital Currency Group, Genesis' lawyers said successful a tribunal proceeding connected Monday.

The restructuring woody and betterment program were announced during a presumption league for crypto lender Genesis, which filed for bankruptcy extortion successful New York connected Jan. 19. Genesis owed its creditors, including Gemini and its users, billions of dollars.

Gemini, founded by Cameron and Tyler Winklevoss, had been engaged successful a high-profile back-and-forth with Barry Silbert, who owns DCG. The Winklevoss twins person publically blamed Silbert's mismanagement of Genesis for issues with 1 of its ain products called Earn, which promoted returns of up to 8% connected lawsuit deposits.

"This program is simply a captious measurement guardant towards a important betterment of assets for each Genesis creditors," Gemini told its users successful correspondence viewed by CNBC. It demonstrates "Gemini's continued committedness to helping Earn users execute a afloat recovery."

The broader details of the restructuring program were announced successful Manhattan bankruptcy court. The deal, chopped betwixt Genesis, DCG, Gemini, and Genesis' scope of creditors, is mostly predicated astir a refinancing of Genesis' loans to DCG. Genesis loaned implicit $500 cardinal worthy of currency and bitcoin to DCG, successful portion to money laminitis Silbert's task investments.

DCG volition besides lend to Genesis "all equity" successful Genesis' trading subsidiary, which remained operational during the bankruptcy. Additionally, DCG volition supply a two-tranche indebtedness facility, maturing successful June 2024, with 11% involvement connected 1 tranche, and a 5% interest-paying bitcoin tranche, "roughly adjacent to astir $500 million," a Gensis lawyer said.

DCG volition besides contented convertible preferred banal to Genesis creditors.

DCG besides extended a $1.1 cardinal promissory enactment to Genesis aft crypto hedge money Three Arrows Capital collapsed. The Winklevoss brothers blasted that maneuver arsenic "a implicit gimmick that did thing to amended Genesis' contiguous liquidity presumption oregon marque its equilibrium expanse solvent."

As portion of the betterment plan, that promissory enactment volition beryllium equitized, meaning it volition beryllium converted into thing of substantive value, typically equity, CoinDesk reported.

"Thank you for putting your spot successful america during this challenging time," Gemini said successful its connection to users.

For months, Gemini loaned lawsuit wealth to Genesis for placement crossed assorted crypto trading desks. When Genesis halted its lending concern pursuing the illness of FTX successful November, Gemini Earn was forced to temporarily shutter its operations, arsenic well.

All withdrawals connected Earn person been paused for astir 3 months. Gemini's 340,000 retail clients are angry, and immoderate person travel unneurotic in class actions against Genesis and Gemini.

The Securities and Exchange Commission complaint filed charges against some Gemini and Genesis connected Jan. 12, for allegedly selling unregistered securities successful transportation with a high-yield merchandise offered to depositors.

WATCH: Crypto broker Genesis files for Chapter 11 bankruptcy