“Digital Currency Group Defaults on $630 Million Payment to Gemini, Legal Battle Ensues”
In a recent development, Digital Currency Group (DCG) has failed to fulfill a $630 million payment owed to Gemini, leading to potential legal action. Gemini’s CEO, Cameron Winklevoss, intends to sue DCG CEO Barry Silbert and the organization for defaulting on a $900 million loan.
The situation worsened significantly for DCG’s Genesis unit after it filed for Chapter 11 bankruptcy amidst allegations of commingling funds. This compounded the debt-related issues. Earlier, the US Securities and Exchange Commission (SEC) had accused both firms of selling unregistered securities.
Currently, Gemini and DCG are engaged in negotiations to resolve the financial matter. In the absence of a mutually agreed-upon deal, Gemini and other affected creditors are prepared to propose their own reorganization plan, which wouldn’t require DCG’s approval. Gemini’s press office emphasized that the consideration for such a plan would hinge partly on DCG’s willingness to negotiate in good faith.
Cameron Winklevoss, the co-founder of Gemini, publicly criticized DCG CEO Barry Silbert, accusing him of employing “bad faith tactics to derail negotiations.” Winklevoss asserted that Silbert was merely stalling and making false promises to evade litigation.
Gemini is actively preparing to file a claim seeking to recover over $1.1 billion worth of Genesis digital assets for more than 200,000 Earn program users.
In a recent move, Genesis’s legal team filed a petition with the Bankruptcy Court for the Southern District of New York, requesting an extension for the deadline to submit a Chapter 11 plan. If approved, the firm will have until August 27 of this year to disclose a new course of action, while Gemini will have until October 26th to approve it. Genesis currently owes more than $3.5 billion to its top 50 lenders, including Gemini, Cumberland, Mirana, MoonAlpha Finance, and New Finance Income Fund VanEck.