Gemini's Cameron Winklevoss Threatens Legal Action Against DCG CEO After Genesis Bankruptcy Filing
The exchange CEO has been involved in a weeks-long public spat with DCG over the repayment of a $900 million loan.
Gemini CEO Cameron Winklevoss threatened to sue Digital Currency Group CEO Barry Silbert and DCG over the repayment of a $900 million loan in a tweet published just minutes after Genesis filed for Chapter 11 late Thursday night in New York. The tweet comes after Winklevoss waged a Twitter war against DCG to recover the loan amid his crypto exchange’s own struggles.
Winklevoss called the lender’s bankruptcy a “crucial step” toward recovering Gemini users’ assets. But he still intends to sue DCG, Silbert and Genesis unless Silbert makes a "fair offer" to Gemini's creditors.
“We have been preparing to take direct legal action against Barry, DCG and others who share responsibility for the fraud that has caused harm to the 340,000+ Earn users and others duped by Genesis and its accomplices,” wrote Winklevoss.
The latest tweets follow a weeks-long public spat between Winklevoss and Silbert over the repayment of a $900 million loan Gemini made to Genesis. Winklevoss has also called for Silbert’s ouster from DCG, alleging that Silbert had mixed funds among the numerous companies he manages.
However, in its voluntary petition for Chapter 11 bankruptcy protection in the Southern District of New York court, Genesis Global Capital disputed some of Gemini's claims. Genesis pointed out the $900 million loan is the net proceed from the foreclosure of certain assets, and disputes whether the foreclosure satisfied applicable law.
In his latest tweets, Winklevoss also reiterated his previous allegations that Silbert failed to cooperate with Gemini to draft a plan for the loan’s repayment.
DCG is also the parent company of CoinDesk.
“While we have been working around the clock to negotiate an acceptable solution, @BarrySilbert and @DCGco – the parent company of Genesis – continue to refuse to offer creditors a fair deal,” wrote Winklevoss.
Gemini and Genesis forged a working relationship in 2021 for Gemini Earn, a high-yield-bearing offering serving hundreds of thousands of U.S. investors. For the Earn product, Gemini lent customers’ funds to Genesis, which, in turn, loaned that money out to other crypto firms.
But things went south in November when Genesis suspended redemptions and new loan originations after making a series of bad loans to crypto firms Three Arrows Capital and FTX, both of which later wound up in bankruptcy court. Without access to their funds, some Gemini Earn users turned on Winklevoss, suing him and the exchange's co-founder, his brother Tyler, for alleged fraud.
Genesis’ bankruptcy announcement comes at a time when Genesis and Gemini are embroiled in a dispute with regulators. The U.S. Securities and Exchange Commission (SEC), in a lawsuit filed late last week, allege the two firms sold unregistered securities through the Earn program.
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