Gemini CEO Threatens Legal Action Over Unresolved Funds

Cameron Winklevoss, founder and CEO of cryptocurrency exchange Gemini, is threatening to prosecute Digital Currency Group (DCG) and its CEO Barry Silbert over delays in resolving the issue of funds owed to Gemini by insolvent lender Genesis.

Winklevoss accuses Silbert of playing the victim card. In his strongly worded letter, Winklevoss accuses Silbert of intentionally delaying resolution through “abuse” of the mediation process saying:

“Mediation has given DCG an indefinite forbearance on the $630 million it owes Genesis — for free.“

The letter states that, according to Winklevoss, Silbert’s apparent claim of being the “victim” of the scandal has been the most disquieting aspect of the debacle. Adding:

“Not even Sam Bankman-Fried was capable of such delusion.”

“It takes a special kind of person to owe $3.3 billion to hundreds of thousands of people and believe, or at least pretend, that they are some sort of victim,” Winklevoss said, adding that DCG’s Genesis was the lender behind Gemini’s Earn program, which promised returns of up to 8% to depositors.

However, Genesis declared on November 16, 2022, that it would momentarily prohibit withdrawals due to “unprecedented market turmoil.”

Genesis filed for bankruptcy on January 19, 2023, and Gemini has since sought to recover its share of the billions owed to creditors by Genesis.

However, after what Winklevoss describes as multiple delays, he appears to have reached his limit. “I am writing to inform you that your games are over,” Winklevoss wrote, explaining that professional fees have “exploded” to more than $100 million at the expense of credits and Earn users.

“Enough is enough.” Winklevoss has issued an ultimatum to Silbert to accept his firm’s “best and final offer” by July 6, 4 p.m. Eastern Time, or be sued on July 7.

The final offer to DCG from Winklevoss. Source: Twitter

The proposed offer requires DCG to pay $275 million by July 21, $355 million by July 21, 2025, and $835 million by July 21, 2028—ffive years from the “Plan Support Agreement” date proposed by Winklevoss.

The total amount payable is $1.47 billion. Winklevoss desires that the payments be made in Bitcoin, Ether, and U.S. dollars, with the funds originating from Genesis Global Trading, potential payouts from FTX and Alameda Research’s bankruptcy estates, and Avalanche AVAX and NEAR tokens that it may have a claim to form Three Arrows Capital’s bankruptcy.