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Gemini seeks to exact its owed payment sum from Genesis parent DCG and is working with several creditors on a forbearance plan.
Gemini Trust Company LLC recently said that Genesis parent DCG missed a $630 million loan payment last week. This development is the latest occurrence in the ongoing dispute between the Cameron Winklevoss-run crypto custodian and digital currency VC firm.
In January, Gemini CEO Winklevoss threatened to sue his DCG counterpart Barry Silbert, and the entire company, over a $900 million loan repayment. At the time, Winklevoss’ threat came after one of DCG’s subsidiaries, Genesis, filed for Chapter 11 bankruptcy. The Gemini chief executive has been trying to recover his company’s loans and users’ assets from the sunk VC company.
Following DCG’s recent failure to fork over $630 million in payment to Gemini, the Winklevoss-run crypto exchange has taken active steps. Gemini is working closely with DCG and some of its subsidiaries, including Genesis and CoinDesk, to provide forbearance to DCG. The reason for this action is to avoid a default.
DCG also owes digital asset financial facilitator Genesis and crypto-focused news site CoinDesk.
Gemini Provides Update to Contingency Plan Involving Genesis and DCG Following Payment Miss
On its site, Gemini posted updated contingency plans it would execute if unable to reach a deal with DCG. The crypto custodian and other parties propose an amended reorganization scheme with Genesis. However, should this scenario occur, Gemini pointed out in the proposal that DCG’s approval would not be required.
“In the event a deal cannot be reached, Gemini (along with the other parties) is working with Genesis to suggest terms for an amended plan of reorganization that could be advanced without DCG’s consensual approval…This would be a plan that would have Gemini’s input if not outright support.”
The New York-based crypto exchange and custodian also wrote in its updates:
“Consideration will be based in part on whether the parties believe DCG will engage in good faith negotiations on a consensual deal.”
Winklevoss Previously Accused DCG CEO of ‘Bad Faith Stall Tactics’
Amid the repayment spat, Winklevoss, also Gemini’s co-founder, accused DCG’s Silbert of “bad faith stall tactics.” In an open letter posted on Twitter on January 2nd, Winklevoss ripped into the DCG CEO for ‘altering the lives’ of over 340,000 affected Earn users. The Gemini co-founder and CEO also pointed out that his company awaited a repayment agreement update from DCG for six weeks to no avail. At the time, Winklevoss lamented, “For the past 6 weeks, we have done everything possible to engage with you in good faith.” He also said that DCG repurposed $1.675 billion of owed money to further its own interests instead of repaying creditors. Some of these alleged ‘self-serving’ actions include share buybacks and illiquid venture investments that “ballooned” DCG Trust’s fee-generating AUM.
Winklevoss concluded his scathing missive at DCG by stressing that time was running out. He also said the VC firm could not remove itself from its loan obligations, however hard it may try.
Less than an hour after Winklevoss posted his open letter, Silbert responded, saying DCG did not borrow $1.675 billion from Genesis. Furthermore, at the time, the embattled CEO added that his company was current with all its interest payments and outstanding loans. Lastly, Silbert stressed that DCG had yet to receive a response from the December 29th proposal sent to Genesis and Gemini advisors.
Meanwhile, late last week, Genesis attorneys filed a request to a New York bankruptcy court seeking an extension for a Chapter 11 plan.