Cryptocurrency exchange Gemini is suing DCG, the parent company of bankrupt crypto broker Genesis, after a dispute over the Gemini Earn Program.
The exchange decided to sue Digital Currency Group (DCG) and its CEO after the company missed the deadline to agree to a restructuring deal put forward by the Winklevoss twins.
The Restructuring Proposal
Winklevoss twins-founded Gemini exchange had set Thursday afternoon as the deadline for Digital Currency Group and Genesis to agree to a restructuring deal. Gemini stated that if the deal was not agreed to within the specified deadline, it would pursue litigation. Crypto lending firm Genesis had filed for bankruptcy in January following the collapse of key counterparties of the firm, such as FTX, causing it to freeze all redemptions.
While Genesis’ lending unit had outlined a plan to exit bankruptcy, it has so far been unable to reach an agreement on a restructuring plan for creditors, to whom it owes over $3 billion. The largest creditor, Winklevoss twins-founded Gemini, is looking to recover around $1.1 billion. In a letter to DCG CEO Barry Silbert, Cameron Winklevoss shared what he called his “best and final offer” and stated that the deadline for DCG to agree to the proposal was 4 p.m. EDT (2000 GMT) on July 6, adding that he wanted a simple yes or no answer and no further delays or extensions.
The restructuring proposal put forward by Winklevoss included a forbearance payment of $275 million, a debt tranche of $355 million due in two years, and another debt tranche of $835 million due in five years. DCG would also be able to retain the proceeds from the sale of Genesis’ lending unit.
DCG Misses Deadline, Gemini Sues
However, DCG missed the deadline set by Gemini to agree to the restructuring deal, leading to the latter suing DCG. According to the lawsuit, DCG and its CEO, Barry Silbert, misrepresented the accounting treatment of liabilities that the company had assumed from Genesis. These liabilities stemmed from losses that Genesis suffered after the Singapore-based crypto hedge fund Three Arrows Capital (3AC) collapsed. In a long thread on Twitter, Cameron Winklevoss stated that the exchange had filed a lawsuit against DCG and Silbert for personally masterminding a fraud scheme against creditors.
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Author: Amara KhatriDid you like this?
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