Gemini Alleges DCG Failed To Pay $630M In Crypto Custody Dispute
- Gemini CEO Cameron Winklevoss threatens to sue DCG CEO Barry Silbert and DCG over the repayment of a $900 million loan after Genesis filed for Chapter 11 bankruptcy.
- The SEC has accused both firms of selling unregistered securities through their Earn program.
- Gemini is preparing to file a claim seeking the return of over $1.1 billion in digital assets from Genesis for its over 200,000 Earn users.
Digital Currency Group (DCG) missed a $630 million payment owed to Gemini last week, triggering a series of events that have put the spotlight on the cryptocurrency industry.
Gemini CEO Cameron Winklevoss has threatened to sue DCG CEO Barry Silbert and DCG over the repayment of a $900 million loan after Genesis, a DCG entity, filed for Chapter 11 bankruptcy, amid allegations of mixed funds and ongoing disputes about loan repayments. The U.S. Securities and Exchange Commission (SEC) has accused both firms of selling unregistered securities through their Earn program.
The situation has escalated quickly finding themselves in the spotlight. While Gemini and DCG are in discussions, if no deal is reached, Gemini and other parties are proposing an amended reorganization plan with Genesis that doesn’t require DCG’s approval, Gemini said in an update on its site. Although discussions are ongoing, it is unclear whether the parties will reach an agreement. If they do, consideration will be based in part on whether they believe DCG will engage in good faith negotiations on a consensual deal.
Gemini co-founder Cameron Winklevoss has publicly accused DCG CEO Barry Silbert of engaging in “bad faith stall tactics,” which has further fuelled the controversy. Meanwhile, Gemini is preparing to file a claim seeking the return of over $1.1 billion in digital assets from Genesis for its over 200,000 Earn users. The situation has been closely watched by industry insiders and investors, who are looking to see how it will play out and what implications it will have for the broader cryptocurrency market.
Late last week, lawyers for Genesis filed a request to the Bankruptcy Court of the Southern District of New York for an extension of their time allowed to file a Chapter 11 plan and solicit acceptances, which suggests the case could drag on for some time. In the meantime, many are calling for more transparency and accountability in the industry, arguing that incidents like these undermine trust in cryptocurrencies and the companies that operate in this space.
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