Cameron Winklevoss, the co-founder of the Gemini crypto exchange, has made what he called a “final offer” in debt restructuring negotiations over bankrupt digital asset firm Genesis.
This offer is designed to take months of discussions and mediation to resolve and includes a plan for $1.465 billion in USD-denominated forbearance payments and new loans.(BTC), and (ETH).
In an “open letter to Barry Silbert,” the founder of Digital Currency Group (DCG), owner of both Genesis and the crypto asset manager Grayscale, Cameron Winklevoss expressed frustration with DCG’s delays in formulating a satisfactory repayment plan for Genesis creditors.
The Gemini co-founder also alleges that “the DCG company had engaged in fraudulent conduct,” while Barry Silbert personally nurtured “a culture of lies and deceit.”
The offering also includes customers of Gemini’s Earn program, the exchange’s high-yield investment service that had Genesis as its primary lending partner before the latter suspended withdrawals in November 2022.
In May of this year, Gemini said DCG missed a $630 million debt payment and defaulted on its obligations.
‘Game over’ for DCG, says Gemini co-founder
Now, as Cameron Winklevoss claims, it’s “game over” for both DCG and Silbert.
Continued delays in resolving the case also, he said, caused “professional fees to exceed $100 million, all of which have gone to attorneys and consultants at the expense of creditors and Earn users.”
“Enough is enough,” said the Gemini co-founder if he too shared a document titled “Best and Final Offer – July 3, 2023.”
The document outlines a proposed plan involving $1.465 billion in payments and loans, with the deadline for accepting the offer at 4 p.m. ET on July 6. Not going along with the plan would result in Gemini filing a lawsuit against DCG and Silbert personally. .
In addition, the crypto exchange plans to demand that the Genesis Special Committee fulfill its fiduciary duties by filing a turnover motion on or before July 7 that would declare DCG in default — along with demanding the immediate payment of $630 million owed to creditors and Earn users.
In the closing remarks, Cameron Winklevoss addressed Silbert and said that he has seen “a lot of bad behavior” from him in recent months, but what bothers Genesis president the most is that in all these situations, the DCG founder plays a victim card.
“Not even Sam Bankman-Fried was capable of such a delusion,” said the Gemini co-founder.
DCG did not immediately respond Decrypt request for comment.
Gemini accuses DCG of ‘fraud’
According to the letter, in June and July 2022, Silbert, DCG and Genesis “knowingly lied” to creditors, Earn users and Gemini to make them believe that DCG absorbed the $1.2 billion the crypto lender accrued by the collapse of Three Arrows Capital. (3AC).
“In reality, DCG did not absorb any of these losses and instead entered into a false long-running promissory note to make it appear as if it was doing so without ever sending a penny to Gemeni,” the letter reads.
Cameron Winklevoss alleges that Silbert and DCG were involved in this fraudulent transaction and subsequent accounting fraud to buy time to dig themselves out of the $1.2 hole that 3AC blew into Genesis.
“Fake until you make it. You hope that everyone will not become wiser. Unfortunately for you, someone by the name of Sam Bankman-Fried came along and perpetrated and perpetrated an even bigger fraud that had the unwanted effect of exposing your fraud,” said the Gemini co-founder.
According to Cameron Winklevoss, DCG chose to pretend to go through the motions of negotiating a deal, something that “would snare a dope of creditors and position DCG to litigate the promissory notes for many years to come”.
“Delay is critical because it gives you time to resolve the one thing standing in the way of your ability to fight the promissory note: the $630 million dollars DCG owes Genesis. This loan is the sword of Damocles hanging over your head,” the letter reads.
The Gemini co-founder went on to say that as of May 1, “the writing was on the wall”: DCG didn’t have the $630 million needed to repay Earn clients and was “on the verge of going off a cliff .”
While creditors “reluctantly” agreed to give DCG more time, “8 weeks later and multiple extensions later, there is still no deal,” Winklevoss said, adding that the mediation has granted FCG “an indefinite deferment for the $630 million it owes Genesis – for free.”