Introduction
Cameron Winklevoss, co-founder of Gemini cryptocurrency exchange, has published an open letter to Digital Currency Group (DCG) CEO Barry Silbert, accusing him of abusing the arbitration process to avoid paying the $1.2 billion debt owed to the exchange. Winklevoss threatened legal actions if Gemini’s demands are not met.
Background
Winklevoss represents 232,000 Earn users who have over $1.2 billion of assets trapped in Genesis, a company owned by DCG. According to Winklevoss, Silbert and his lawyers have shown no intention of achieving a resolution with creditors and Earn users. Instead, they have focused on buying time to raise money and stiff creditors.
Fraudulent Actions
Winklevoss accuses Silbert of multiple acts of fraud and bad-faith negotiations. Silbert allegedly engaged in a fraudulent transaction and accounting fraud to make it appear that DCG had absorbed the losses incurred by Genesis. However, Winklevoss claims that DCG did not absorb any of these losses and instead created a promissory note without transferring any funds to Genesis.
Delaying Tactics
According to Winklevoss, Silbert’s goal has been to delay and stonewall creditors while raising money to pay down the $630 million debt that DCG owes Genesis. When it became clear that Silbert could not raise the money, he entered into a mediation process as a last resort.
Gemini’s Final Offer
Gemini’s final offer demands that Silbert agree to a Plan Support Agreement (PSA) with creditors. The offer includes a forbearance payment of $275 million denominated in BTC and USD, followed by two payments to cover the outstanding debt. The total amount of the payments would be $1.465 billion.
Next Steps
If Silbert and DCG do not agree to the deal by the specified deadline, Gemini plans to file a lawsuit against DCG and Silbert personally. They will also demand that the Genesis Special Committee fulfill their fiduciary duties and work with creditors to advance a non-consensual plan. Additionally, they will demand that the Unsecured Creditor Committee (UCC) file a lawsuit and take depositions related to their investigation into the loans and transactions between DCG and Genesis entities.
Conclusion
Winklevoss asserts that the games are over and presents Gemini’s best and final offer. He warns that failure to accept the deal will result in legal actions and further consequences for Silbert and DCG.
