Cameron Winklevoss ready to take legal action against DCG’s Barry Silbert

Gemini co-founder Cameron Winklevoss said he could sue Digital Currency Group CEO Barry Silbert for allegedly defrauding over 340,000 Earn users.

The threat comes shortly after Genesis (a subsidiary of DCG) filed for Chapter 11 bankruptcy protection.

The verbal battle continues

Genesis and Gemini partnership started in late 2020 and 2021 they started offer the Gemini Earn program for individual investors.

However, The crash of FTX disrupted the operations of Genesis and its parent company, Digital Currency Group, and ultimately impacted the aforementioned collaboration.

When CryptoPotato reportedGenesis (the stopped user withdrawals in late November last year) owes more than 340,000 Gemini customers $900 million. The trading floor run by Wiklevoss has set up a creditors’ committee to try to recover these funds, but so far without success.

Genesis couldn’t cope with his problems and earlier this week filed for bankruptcy protection. Shortly after the news broke, Winklevoss threatened Silbert with “direct legal action”:

“If Barry and DCG don’t come to their senses and make a fair offer to the creditors, we will be filing a lawsuit against Barry and DCG shortly,” he said.

On the other hand, he argued that filing for bankruptcy was a “crucial step” that could allow Gemini customers to recover their assets. Genesis will be subject to court oversight and “necessary to uncover the machinations that have brought us to this point,” the American investor explained.

Winklevoss assured that its platform would use “every tool available” from the bankruptcy court to maximize recovery of impacted customers.

“We also believe that Genesis, DCG and Barry owe them an explanation in addition to owing all their money back to creditors. The insolvency court offers a much-needed forum for this. Sunlight is the best disinfectant,” he concluded.

The beginning of the spit

Winkelvoss claims As of early 2023, DCG owes Genesis over $1.6 billion. He claimed that the main person blamed for this “mess” is Barry Silbert, who allegedly took those funds from “school teachers to spur greedy share buybacks” and “illiquid venture investing.”

Silbert denied these allegations, saying:

“DCG did not borrow $1.675 billion from Genesis. DCG has never missed an interest payment to Genesis and is current on all outstanding loans; The next loan maturity is May 2023. DCG submitted a proposal to Genesis and its advisors on December 29 and received no response.”

The dispute escalated at Winklevoss last week pushed the board of directors of DCG to immediately fire CEO Barry Silbert. He accused the latter of making false statements, such as assuming the $1.2 billion loss suffered after the failure of Three Arrows Capital (3AC).

Gemini’s boss went on to insist that Silbert had proved “unsuitable” to run DCG and had not attempted to resolve creditor problems.

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