In an attempt to achieve a final settlement of the Earn issue, Gemini has announced that a negotiation process is imminent.
To this end, Gemini together with Genesis, its parent firm Digital Currency Group (DCG), and the Unsecured Creditors Committee (UCC) have scheduled a 30-day mediation process.
Proposed Timeline for Settlement
According to Gemini’s recent update, two separate meetings have been scheduled to take place before May 8th. This date is significant because DCG is expected to pay back the $630 million it owes to Genesis between May 9-11. If DCG is unable to meet its debt obligations when due, the company risks defaulting on its obligations.
Therefore, the parties are expected to work quickly to reach an agreement within the immediate window, even if the mediation is set to last up to 30 days.
Possible Outcome from the Mitigation
One possible outcome of the mitigation process could be a settlement agreement between the parties. It is also possible that the settlement could involve compensation for investors. However, any effective mitigation effort would probably involve a mix of remedial measures, openness, and public involvement.
Is Gemini Sheathing Legal Sword?
As per the update, Gemini said it eagerly anticipates the commencement of the mediation next week as well as working with the parties to resolve the issue.
Recall that Gemini’s Co-Founder Cameron Winklevoss, had stated that the firm planned to sue Digital Capital Group (DCG) and its CEO, Barry Silbert for the monies owed to Gemini clients. However, Cameron added that the firm will back out of a future lawsuit if DCG and Silbert offer a reasonable settlement to the consumers of Gemini whose cash is still locked up in the Earn program.
Cameron provided the statement shortly after Genesis revealed that it was filing for bankruptcy protection after losing funds owing to the failure of the bankrupt FTX exchange and Three Arrows Capital.
Recanting the Gemini and Genesis Brawl
The partnership between Gemini and Genesis got its start with Gemini serving as the primary partner for Gemini Earn.
The troubles between both organizations started in November when Genesis revealed that it was momentarily limiting customer lending withdrawals. This was after the company lost about $175 million to the defunct FTX exchange after it failed. As a result, $900 million belonging to Gemini Earn users was frozen in Genesis.