Gemini lawyers accuse DCG of gaslighting in latest recovery plan

Quick Take

  • Gemini called Genesis parent company Digital Currency Group’s plan to offer creditors almost full recovery an “attempt to bait the Gemini Lenders into accepting a deal that would allow DCG to pay far less than it owes.”

Crypto exchange Gemini is accusing Genesis parent company Digital Currency Group of "gaslighting" with a proposed new deal for creditors. 

That agreement, released on Wednesday as part of Genesis’ bankruptcy proceedings, would provide a framework for creditors that would offer "all unsecured creditors a 70-90% recovery with a meaningful portion of the recovery in digital currencies," according to DCG. 

Gemini, though, does not seem to be on board. 

"Through the DCG Statement, DCG continues its campaign of contrived, misleading, and inaccurate assertions in an attempt to gaslight creditors of the Genesis estate generally, and the Gemini Lenders specifically, and escape responsibility for the harm it has caused them," lawyers representing Gemini said on Friday in a filing

They called it an "attempt to bait the Gemini Lenders into accepting a deal that would allow DCG to pay far less than it owes."

Back and forth 

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Genesis’ lending unit filed for bankruptcy earlier this year. 

Gemini and DCG have been feuding since Genesis froze withdrawals of the retail lending program Gemini Earn. Over the summer, Gemini's co-founders Tyler and Cameron Winklevoss accused DCG CEO Barry Silbert and Genesis of misleading investors.

Gemini Earn allowed people to lend digital assets to Genesis Global as part of a tri-party contract.

The plan DCG proposed on Wednesday would renegotiate the terms of a $630 million loan between Genesis and DCG, and part of the loan will be paid back in cash shortly after the deal's close with the remainder structured into a two year note. 

The plan would need a vote from creditors to be implemented. 


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About Author

Sarah is a reporter at The Block covering policy, regulation and legal happenings. Before, Sarah was a reporter with CQ Legal writing about securities regulation, which is where she first started reporting on crypto. Sarah has also written for The Bond Buyer and American Banker, among other finance-related publications. She graduated from the University of Missouri and earned a degree in print and digital journalism. Sarah is based in Washington D.C., and is an avid coffee lover. You can follow her on Twitter @ForTheWynn.

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