Cameron Winklevoss Threatens Legal Action Against DCG CEO After Genesis Bankruptcy
Gemini CEO Cameron Winklevoss threatened to sue Digital Currency Group CEO Barry Silbert over the repayment of a $900 million loan in a tweet published just minutes after the crypto lender’s Chapter 11 filed for Chapter 11 bankruptcy late Thursday night. The tweet comes after Winklevoss waged a Twitter war against DCG to recover the loan amid his exchange’s own struggles.
6/ Unless Barry and DCG come to their senses and make a fair offer to creditors, we will be filing a lawsuit against Barry and DCG imminently.— Cameron Winklevoss (@cameron) January 20, 2023
Winklevoss called the lender’s bankruptcy a “crucial step” toward recovering Gemini users’ assets. But, he still intends to sue Silbert and Genesis’ parent company, DCG, unless Silbert makes a "fair offer" to its 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.
This latest series of tweets follows a weeks-long public spat between Winklevoss and Silbert over the repayment of a $900 million loan Gemini made to Genesis. In the midst of the very public altercation, Winklevoss called for Silbert’s ousting from DCG, alleging Silbert had mixed funds between the numerous companies he manages and engaged in “bad faith stall tactics” as Gemini attempted to recollect its millions.
However, in its voluntary petition for chapter 11 bankruptcy, Genesis Global Capital disputed Gemini's claim. Genesis pointed out that $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 failed crypto firms like Three Arrows Capital and FTX. Without access to their funds, Gemini Earn users turned on Winklevoss, suing him and his co-founder brother for alleged fraud.
Genesis’ bankruptcy announcement comes at a time when both companies are embroiled in a dispute with regulators. The U.S. Securities and Exchange Commission (SEC) alleged Gemini and Genesis sold unregistered securities in a lawsuit filed late last week.