Winklevoss vs Silbert: After weeks of uncertainty, Gemini co-founder Cameron Winklevoss has expressed some satisfaction following the filing for bankruptcy protection under Chapter 11 by Genesis Trading, a subsidiary of Digital currency Group.
According to Winklevoss, Genesis will be required to provide documentation on how the situation led to this stage. Notably, Genesis Trading and Gemini cryptocurrency exchange entered into a strategic relationship through the latter's Earn program in 2021.
However, things took a turn for the worse after Genesis Trading incurred heavy losses from the collapse of FTX, Alameda, and Three Arrows Capital (3AC). As a result, Digital Currency Group made a strategic move to save Genesis Trading by absorbing its billion-dollar loss through a ten-year promissory note.
Genesis could not cope with its problems and, earlier this week filed for bankruptcy protection. Shortly after the news broke, Winklevoss threatened Silbert with taking "direct legal action:"
"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," he stated.
Winklevoss assured that his platform will use "every tool available" in the bankruptcy court to maximize recovery for its affected clients.
"We also believe that — in addition to owing creditors all of their money back — Genesis, DCG, and Barry owes them an explanation. Bankruptcy court provides a much-needed forum for that to happen. Sunlight is the best disinfectant," he concluded.
Winklevoss claimed at the beginning of 2023 that DCG owes Genesis over $1.6 billion. He maintained that the main person to be blamed for that "mess" is Barry Silbert, who allegedly took those funds from "schoolteachers to fuel greedy share buybacks" and "illiquid venture investments."
Silbert refuted those accusations, saying:
"DCG did not borrow $1.675 billion from Genesis. DCG has never missed an interest payment to Genesis and is current on all loans outstanding; next loan maturity is May 2023. DCG delivered to Genesis and your advisors a proposal on December 29th and has not received any response."
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