The co-founder of US-based exchange giant Gemini is announcing his exchange will sue the parent company of bankrupt crypto lender Genesis.
Yesterday, Genesis Global Capital, LLC filed for Chapter 11 bankruptcy after weeks of speculation that they could do so.
The Gemini co-founder and his twin brother Tyler Winklevoss have been in public social media spat with Genesis’ parent company, Digital Currency Group (DCG), and its CEO Barry Silbert for weeks over the halting of Gemini’s Earn program, which was funded by Genesis. They have even gone so far as to call on DCG to fire Silbert.
Now, in response to the Chapter 11 bankruptcy filing, Winklevoss has taken to social media again, claiming that the filing is actually good for Gemini Earn customers seeking to retrieve their assets.
“Earn Update: This evening, Genesis Global Capital, LLC (Genesis) filed for bankruptcy under Chapter 11. This is a crucial step towards us being able to recover your assets.
While we have been working around the clock to negotiate an acceptable solution, Barry Silbert and DCG — the parent company of Genesis – continue to refuse to offer creditors a fair deal.
The good news is that, by seeking the protection of the bankruptcy court, Genesis will be subject to judicial oversight and be required to provide discovery into the machinations that brought us to this point.
Crucially, the decision to put Genesis into bankruptcy does not insulate Barry, DCG, and any other wrongdoers from accountability.”
Continuing his lengthy diatribe, Winklevoss says Gemini will take direct legal action against Barry Silbert and DCG for the benefit of Gemini Earn customers.
“We have been preparing to take direct legal action against Barry, DCG, and others who share responsibility for the fraud that has caused harm to the 340,000+ Earn users and others duped by Genesis and its accomplices.
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.
Meanwhile, we will use every tool available to us in the bankruptcy court to maximize recovery for Earn users and any other parties within the bankruptcy court’s jurisdiction.
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.
This marks an important milestone in our efforts to help Earn users get their assets back. Doing so remains our highest priority.”
Neither DCG nor Silbert has directly responded to Winklevoss. However, DCG did release a statement this morning on the Chapter 11 filing.
“Yesterday, the Genesis lending entities filed for chapter 11 bankruptcy protection in the Southern District of New York.
Genesis has its own independent management team, legal counsel, and financial advisors, and appointed a special committee of independent directors, who are in charge of the Genesis Capital restructuring, and who recommended and decided that Genesis Capital file chapter 11. Neither DCG nor any of its employees, including those who sit on the Genesis board of directors, were involved in the decision to file for bankruptcy.
DCG will continue to operate business as usual, as will its other subsidiaries, including Grayscale Investments LLC, Foundry Digital LLC, Luno Group Holdings Ltd., CoinDesk Inc., and TradeBlock Corporation. Notably, Genesis Global Trading, Inc., Genesis’ spot and derivatives trading business, will also continue to operate business as usual.
As previously described in shareholder letters, DCG owes Genesis Capital approximately $526 million due in May 2023 and $1.1 billion under a promissory note due in June 2032. DCG fully intends to address its obligations to Genesis Capital in the course of a restructuring.
DCG continues to engage with Genesis Capital and its creditors to reach an amicable solution for all parties.”
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