Gemini Exchange Accuses DCG of Defaulting on $630 Million Payment

May. 22, 2023
Gemini Exchange Accuses DCG of Defaulting on $630 Million Payment

Gemini, the popular cryptocurrency exchange founded by the Winklevoss twins, has raised serious allegations against the Digital Currency Group (DCG) in the ongoing battle between the two entities. 

According to the blog post, the exchange claims that DCG failed to pay the $630 million due last week. This latest development has intensified the already heated dispute between the two parties.

However, the conflict between Gemini and DCG stems from the fallout of the Gemini Earn program, which saw Genesis, the primary partner for the program, abruptly halt withdrawals in November 2022. 

Besides, this maneuver was unexpected by the exchange and triggered the Winklevoss twins’ fury. DCG and its founder, Barry Silbert, who serves as the parent company of Genesis, were promptly threatened with legal action.

Complicating matters, the exchange has been pressing Genesis to devise a repayment plan for a substantial $900 million loan. The exchange had extended this loan to the now-bankrupt Genesis Global.

The feud between Gemini and Genesis continues to play out in public view. The exchange recently provided an update on the situation, outlining the potential paths forward following DCG’s missed payment.

Gemini stated:

Genesis, the Unsecured Creditors Committee [UCC], the Ad Hoc Group of Creditors [AHG], and the exchange are deliberating whether to grant forbearance to DCG to avoid a default. However, the decision will be influenced by DCG’s willingness to engage in good faith negotiations for a mutually agreeable resolution.

The exchange is considering proposing an “amended plan of reorganization” that could proceed without DCG’s consent or involvement if an agreement cannot be reached. Moreover, this alternative plan would serve as a potential course of action to address the ongoing dispute between the parties.

Gemini’s Pursuit of the “Gemini Master Claim”

In their quest to resolve the Genesis and DCG predicament, Gemini has introduced a new strategy called the “Gemini Master Claim.” This initiative aims to recover more than $1.1 billion of cryptocurrencies from Genesis. By pursuing this avenue, the exchange seeks to recoup a significant amount of digital assets that it believes are rightfully owed by Genesis.

According to the exchange, Genesis has allegedly refused to return funds to approximately 232,000 users who were active participants in the Gemini Earn program as of January 19, 2023. In addition, these users now grapple with the challenge of retrieving their funds from Genesis.

Furthermore, as part of their ongoing efforts, Gemini is set to file the “Gemini Master Claim” today. The exchange aims to assert its rights and pursue the recovery of the funds owed by Genesis. 

This legal maneuver signifies the exchange’s decisive step in pursuing justice and the return of user funds. The dispute between Gemini, Genesis, and DCG remains unresolved, with both sides engaged in a tense standoff.

Related Reading | Binance Australia Halts AUD Fiat Services Amidst Third-Party Issues

Ammar Raza

Associate editor
Skilled in crafting compelling content, with a deep enthusiasm for blockchain technology. I offer precise and easily comprehensible perspectives on cryptocurrencies, decentralized finance, and the ever-evolving landscape. Count on me as a reliable resource to remain informed about the latest advancements in the world of crypto.