The CEO of the Digital Currency Group (DCG), Barry Silbert, has been issued an ultimatum by Cameron Winklevoss, the co-founder of the Gemini cryptocurrency exchange. Winklevoss publicly announced Gemini’s “best and final offer” for debt restructuring in an open letter on July 4. Silbert was given a tight deadline of just two days to respond.

The disagreement between Winklevoss and Silbert began approximately eight months ago when DCG holding company Genesis suspended withdrawals and subsequently filed for bankruptcy. According to Winklevoss, Genesis owes $1.2 billion to 232,000 users of the defunct Gemini Earn program. However, Genesis’ bankruptcy filing valued its debt to Gemini Earn users at $765.9 million.

In his final offer for the ongoing debt restructuring negotiations, Winklevoss proposed a total payment plan of $1.465 billion over five years. This structured payment plan includes a forbearance payment of $275 million due by July 21, followed by a $355 million payment in two years and a final $835 million payment in five years. The plan also specifies that payments should be made as 40% in USD, 40% in Bitcoin (BTC), and the remaining 20% in Ethereum (ETH). Winklevoss stated that this proposal is fair and reasonable for everyone involved and represents the minimum acceptable to creditors.

Accusations and Threats

Despite claiming that Gemini had reached an “agreement in principle” with Genesis in February, Winklevoss criticized Silbert for continuously delaying a resolution regarding the repayment of Gemini Earn users. In January, Winklevoss had called for Silbert’s dismissal as DCG chief and reiterated allegations of fraud against the company and Silbert.

Winklevoss referred to Silbert’s 4000-word letter to shareholders in January as a “carefully crafted stupidity” that avoided taking responsibility. He claimed that Silbert’s letter was merely another attempt to buy time and deceive Gemini Earn users. Winklevoss accused Silbert of intentionally delaying and avoiding a consensual resolution with creditors.

Furthermore, Winklevoss accused DCG and Genesis of lying to creditors and Earn users. DCG had assured creditors that it had absorbed Genesis’ loss of $1.2 billion after Three Arrows Capital collapsed. Winklevoss claimed that this transaction was fraudulent and involved a bogus long-dated promissory note, which was exposed with the collapse of FTX in November.

Winklevoss alleged that Silbert has been pretending to negotiate a deal while using the negotiations to delay DCG’s repayment indefinitely. He claimed that DCG has been litigating the validity of the promissory note for years while buying time.

With DCG’s continuous delaying tactics, Winklevoss declared that the “games are over.” If DCG does not accept Gemini’s offer by July 6, Winklevoss threatened potential legal consequences. He stated that Gemini would file a lawsuit on July 7 against DCG and Silbert, outlining Silbert’s personal liability in hiding Genesis’ insolvency.

Gemini will also demand that the Genesis Special Committee file a turnover motion on July 7 to force DCG to immediately repay the $630 million it owes. Additionally, Gemini plans to work with the committee to advance a non-consensual plan with strict deadlines prioritizing immediate repayment to Earn users and other Genesis creditors.

Gemini intends to ask the unsecured creditor committee (UCC) to file a lawsuit investigating the intercompany loans between Genesis and DCG.

In response to the ultimatum, Ram Ahluwalia, CEO of Lumida Wealth Management, suggested that it could be another missed deadline for DCG. He believes that Silbert has little to gain from Gemini’s plan and that it could potentially increase DCG’s legal liabilities. Ahluwalia noted the absence of any equity injection, debt refinancings, and the missed debt payments in May as indications of DCG’s challenging situation.


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