Insiders: Genesis bankruptcy plan revealed, CoinDesk also to seek sale

The Block cited anonymous sources that Genesis creditors are in negotiations with officials discussing the possibility of implementing a prepackaged bankruptcy, or pre-arranged restructuring plan. The CEO of DCG subsidiary CoinDesk also revealed that they are seeking a complete or partial sale of the business.

Prepackaged bankruptcy

Prepackaged bankruptcy is when a company anticipates entering Chapter 11 bankruptcy proceedings in the United States and presents a more comprehensive plan in advance to shorten the bankruptcy reorganization timeline, while also reducing legal and accounting expenses during the restructuring period.

Note: Digital Currency Group (DCG), a digital currency conglomerate, owns subsidiaries including media outlet CoinDesk, mining firm Foundry, lending platform Genesis, and trust fund issuer Grayscale.

Have major creditors like Gemini agreed?

Gemini established a creditors' committee at the end of last year and is continuing to coordinate to finalize the bankruptcy plan.

Sources claim that major creditors like Gemini have agreed to the prepackaged bankruptcy plan, with a grace period of one to two years, where creditors will receive cash and equity in Genesis' parent company Digital Currency Group.

Genesis, DCG, and Gemini have not responded to The Block.

CoinDesk considers selling shares for capital increase

CoinDesk CEO Kevin Worth revealed to The Block that they are considering selling all or part of the business to seek more funding.

In an email, he stated:

"Over the past few months, many institutions have expressed interest in potentially acquiring us, so I have engaged investment bank Lazard as our financial advisor to assist with this. We have asked Lazard to explore various options to attract more capital into CoinDesk, which may include a partial or full sale."

CoinDesk was acquired by DCG in 2016 for a price ranging from $500,000 to $600,000.