Cameron Winklevoss, the co-founder of the Gemini exchange, has launched a blistering open letter to Barry Silbert, founder of Digital Currency Group (DCG) and Genesis. With over $1.2 billion in assets at stake and an ultimatum set for July 6th, this could be the beginning of a legal battle for the ages.
In his open letter, Winklevoss accuses Silbert of intentionally misleading creditors, users of the Earn platform, and Gemini about DCG’s ability to absorb the losses caused by the collapse of Three Arrows Capital Ltd (3AC) in May 2022. Instead of taking the hit, Silbert is alleged to have shuffled papers, created a long-dated promissory note, and, effectively, not sent a single penny to Genesis.
Silbert is accused of negotiating in bad faith. Winklevoss claims that while he’s been making motions towards a resolution, Silbert’s real intention is to drag the issue into court, engaging in a war of attrition over the viability of the promissory note.
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The $630 Million Question
The delay, Winklevoss suggests, is a strategic move allowing Silbert time to pay down a hefty $630 million loan DCG owes Genesis. Failure to pay this loan by its May 2023 due date would lead to DCG defaulting and potentially declaring bankruptcy.
In Winklevoss’s narrative, Silbert has been abusing the mediation process to buy time. With a second default and bankruptcy looming, DCG sought mediation on May 1st when it could not produce the $630 million it owed.
The Best & Final Offer
The billionaire’s patience seems to have worn thin. Winklevoss, representing the 232,000 Earn users, has issued a best and final offer of $1.465 billion, with a clear and urgent deadline of 4pm ET on July 6th. If Silbert doesn’t accept the deal, Winklevoss vows to launch a legal offensive, including lawsuits against DCG and Silbert personally, a turnover motion, a non-consensual plan with a strict timeline, and demanding the Unsecured Creditor Committee (UCC) investigates the intercompany loans and transactions between DCG and Genesis.
Ram Ahluwalia, the head of LumidaWealth, thinks Silbert won’t meet Winklevoss’s deadline. He believes Silbert won’t want to take on the legal risks, especially since other companies, like FTX, are also claiming billions from DCG.
