We aim to update this page on Fridays. This provides us with time to review updates and offer information as relevant. For the latest confirmed information, we recommend that you check this page prior to contacting us directly.

On the morning of November 16th, in consultation with their professional financial advisors and counsel, Genesis took the decision to temporarily suspend redemptions and new loan originations in their lending business.

On January 19th, after two months of negotiations and numerous proposals, Genesis voluntarily filed for Chapter 11 bankruptcy protection. This was an important step for the recovery of funds. According to court filings, Genesis is seeking to exit bankruptcy in ~4 months.

On February 6th, Genesis announced to the court that they had reached an agreement in principle with and amongst its creditors, and on February 10th, this was publicly filed as a Term Sheet. The next steps require a binding agreement to be put in place, and for the court to approve the agreement. This process can take 1-3 months and is highly dependent on court schedules and obtaining the necessary approvals. Once accepted, the court will enter an order of confirmation, making the plan binding on all parties involved.

This week, Genesis released a number of financial statements and associated schedules to the public. The financial advisors have been digging into the information to ensure that the full financial picture is consistent with what has been represented.

Progress toward a binding agreement continues and the next events of interest are an Omnibus Hearing on March 30th and a Meeting of the Creditors on April 13th.

As a reminder, the Donut App will be removed from App Stores by March 31, 2023. All accounts have been migrated to a new web dashboard where you can view your balance, statements, and make future withdrawals.

We will provide the next update on Friday, March 31st.

Genesis, DCG, and creditors reached an in-principle agreement on the terms of plan support agreement. This was announced in court on Monday, Feb 6th, and publicly filed as a Term Sheet on Friday, Feb 10th. This Term Sheet allows us to accelerate toward a resolution united. The economics of the plan are subject to material change, but based on initial diligence and analysis by Houlihan Lokey, this plan has a recovery rate of approximately $0.80 per dollar, with a longer-term pathway through to par. This agreement is still preliminary and will likely shift until it’s binding, yet we are encouraged by the progress this checkpoint represents.

The next steps require a binding agreement to be put in place, and for the court to approve the agreement. This process can take 1-3 months and is highly dependent on court schedules and obtaining the necessary approvals. Once accepted, the court will enter an order of confirmation, making the plan binding on all parties involved. At this point, we will be able to better inform you of the expected distribution values, timing, and schedule. We anticipate distributions to start within days of these confirmations.

Generally speaking, Chapter 11 cases can take anywhere from 6 - 12 months to complete but according to court filings, Genesis plans to exit bankruptcy in ~4 months. Once the in-principle plan support agreement is accepted, we will be able to better inform you of the expected distribution values, timing, and schedule.

When Genesis suspended redemptions, it had a significant and negative impact on Donut. Sadly, we feel we have no other alternative than to take our apron off and announce the discontinuation of Donut. To learn more about the details of this decision click here.

The funds recovered from Genesis will be made available to you for withdrawal in full. Once the in-principle plan support agreement is accepted, we will be able to better inform you of the expected distribution values, timing, and schedule. We’ll ensure that you have adequate support throughout the recovery process once distributions begin.

When a company files for Chapter 11 bankruptcy, it asks the court for protection from its creditors while it reorganizes its business and its debts. The goal of a Chapter 11 bankruptcy is for the company to come up with a plan to repay its creditors as much as possible. Under Chapter 11, the company's management remains in control of the business, but it operates under the supervision of the court and a trustee. The company will file a plan of reorganization that outlines how it plans to repay its creditors, and the creditors will have a chance to vote on the plan. If the plan is approved by the court and a majority of the creditors, the company will be able to emerge from bankruptcy and continue operating.

Genesis Global Holdco LLC, the parent company Genesis Global Capital, and its subsidiaries Genesis Asia Pacific Pte. Ltd and Genesis Global Capital, LLC filed a trio of voluntary petitions with the bankruptcy court. All three fall under the umbrella of Digital Currency Group. Genesis’s derivatives and spot trading, broker dealer, and custody businesses remain active and will be assessed to understand the value that can be contributed from their trading arm to facilitate the obligations of Genesis.

Despite not being selected to the Unsecured Creditor Committee, we trust that those selected will fulfill their role in maximizing the recovery for creditors.

The economics of the plan are subject to material change, but based on initial diligence and analysis by Houlihan Lokey, this plan has a recovery rate of approximately $0.80 per dollar, with a longer-term pathway through to par. This agreement is still preliminary and will likely shift until it’s binding.

To fill the $1.1 billion hole in Genesis’ balance sheet from the 3AC default, DCG entered into a 10-year promissory note with Genesis at an interest rate of 1% – due in 2032. To induce new capital from lenders, Genesis’s team and balance sheet represented this Promissory Note as a Current Asset, able to be quickly converted to cash within 12 months or less. You can think of this instrument as a long-term IOU, that was represented as a short-term IOU on Genesis’ balance sheet. Today, Genesis, DCG, and their advisors deny that this Promissory note is a “Current Asset.” Current assets on a balance sheet include cash, cash equivalents, short-term investments, and other assets that can be quickly converted to cash—within 12 months or less.

Overcollateralization seeks to protect lenders from borrower default. If at any point during the loan, it is no longer overcollateralized, the borrower will be margin called and asked to put up more collateral. If the borrower fails to, the collateral is liquidated. So long as the loans are performing, lenders are unable to liquidate a borrower’s collateral. All the lender (Genesis) can do is wait until the loan matures. This is a liquidity issue with duration mismatch, and what Genesis faces today.

All assets have been safely withdrawn from other lending partners and made available for withdrawal.

Yes. All assets with our non-Genesis lending partners are now available for withdrawal. To withdraw these funds, please log in to your web dashboard.

For members of the Save plan, 5% of your total balance is available to withdraw. For members of the Build plan, 14.5% of your balance is available to withdraw. These percentages represent the amount of funds allocated to non-Genesis partners per plan. The remaining funds are held 1:1 at Genesis, and access to them will adhere to Genesis’ resolution plan.

The Save and Build plans have different compositions and lenders. Each plan contains the relevant lender information within the app.

Your current balance, after withdrawing the full value of your funds from other lending partners, is with Genesis in its entirety, who continues to prevent withdrawals. Donut is not holding any of your funds nor preventing withdrawals. Deposits on Donut are put to work right away. They are passed directly to lending partners and entered into loans. When you initiate a withdrawal, we call those funds back from lending partners to process your withdrawal.

Genesis is our principal lending partner at Donut. By pausing redemptions, Donut is unable to withdraw user funds from Genesis.

All account services on Donut are temporarily paused, with the exception of withdrawals of non-Genesis funds.

No.

Your account continues to be protected with 2FA, your PIN, and the AES-256 data security standard.

If you have not canceled your Direct Deposit with your employer, it will still arrive to Donut as expected. If your Direct Deposit is received by Donut, please reach out to us at [email protected] and we can provide options.

We aim to update this page on Fridays. This provides us with time to review updates and offer information as relevant. For the latest confirmed information, we recommend that you check this page prior to contacting us directly.