Just In: Gemini Challenges DCG’s Deceptive Genesis Proposal

Kelvin Munene Murithi
September 16, 2023
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DCG Digital Currency Group

In a recent report, Gemini has accused Genesis’ parent company, the Digital Currency Group (DCG), of presenting a misleading proposal for creditors. The ongoing dispute centers around the recovery rates promised by DCG, which Gemini’s legal team finds disingenuous.

Moreover, in a recent development, lawyers for Gemini Trust presented a sharp rebuttal against DCG’s plan. This proposal, tabled in the U.S. Bankruptcy Court for the Southern District of New York, suggested 70-90% recovery rates for unsecured creditors. Additionally, Gemini Earn users were promised a 95-110% recovery. However, this seemingly generous offer has stirred controversy.

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DCG’s Proposal Under Fire

Hence, Gemini’s legal representatives claim DCG’s proposal contains “contrived, misleading, and inaccurate assertions,” painting it as an attempt to manipulate the situation. They assert that the proposed recovery rates are far from reality and not in real value terms. Consequently, Gemini feels that DCG’s primary aim is to pay less than its obligations.

Significantly, the feud between Gemini and DCG has its roots in the Gemini Earn program, a venture partly financed by Genesis. Following unprecedented market turmoil triggered by FTX’s collapse, Genesis halted withdrawals and declared bankruptcy in January 2023. 

Besides, court documents reveal Genesis’ massive debt, owing over $3.5 billion to its top 50 creditors. This move led Gemini to launch a lawsuit against DCG, claiming recovery of $1.1 billion for its Earn users and accusing DCG of fraud.

In addition, Gemini co-founder Cameron Winklevoss didn’t mince words. He labeled Barry Silbert, DCG’s CEO, as the mastermind behind the alleged deceit. The case took another twist when the U.S. Securities and Exchange Commission filed a civil suit against Gemini and Genesis for potential unregistered securities sales through the Earn program.

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Resolution Awaited

The DCG’s recent proposal aims to renegotiate the terms of a $630 million loan between Genesis and DCG. With a part of this loan slated for cash repayment after the deal concludes and the remainder structured into a two-year note, the resolution is far from simple. 

In addition, the next step in this legal tangle is a crucial vote by the creditors, determining the fate of DCG’s plan. Whatever the outcome, the crypto world watches closely, waiting for the dust to settle.

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
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Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Kelvin Munene is a crypto and finance journalist with over 5 years of experience, offering in-depth market analysis and expert commentary . With a Bachelor's degree in Journalism and Actuarial Science from Mount Kenya University, Kelvin is known for his meticulous research and strong writing skills, particularly in cryptocurrency, blockchain, and financial markets. His work has been featured across top industry publications such as Coingape, Cryptobasic, MetaNews, Cryptotimes, Coinedition, TheCoinrepublic, Cryptotale, and Analytics Insight among others, where he consistently provides timely updates and insightful content. Kelvin’s focus lies in uncovering emerging trends in the crypto space, delivering factual and data-driven analyses that help readers make informed decisions. His expertise extends across market cycles, technological innovations, and regulatory shifts that shape the crypto landscape. Beyond his professional achievements, Kelvin has a passion for chess, traveling, and exploring new adventures.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.