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HomeDigital AssetsWinklevoss accuses Barry Silbert of fraud, submits $1.5B offer
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Winklevoss accuses Barry Silbert of fraud, submits $1.5B offer

Describing it as a “best and final offer,” Winklevoss aims to put an end to months of extensive discussions and mediation.

The proposal presented by Winklevoss encompasses a detailed plan worth $1.46 billion. The bid includes forbearance payments as well as new loans that are denominated in USD, Bitcoin (BTC), and Ethereum (ETH). This substantial amount will be paid out in multiple installments, with each tranche scheduled to be settled at different intervals. Additionally, a forbearance payment is included in the deal, which is set to be paid on July 21.

Gemini founder took to Twitter on Monday to share an open letter addressed to Barry Silbert, the founder of Digital Currency Group (DCG). In this letter, Winklevoss expressed his deep frustration with DCG’s prolonged delays in formulating a payment plan that meets the expectations of Genesis’s creditors. That was accompanied by a strong warning that legal action could be pursued against Silbert and DCG if mutually agreeable terms were not reached by the deadline of 4 pm ET on July 6.

“I write to inform you that your games are over. In addition to dragging out a resolution, they have ballooned professional fees to over $100 million, all of which have gone to lawyers and advisors at the expense of creditors and Earn users,” wrote Winklevoss in the letter.

DCG missed a $630 million payment that was due in May to Gemini, the cryptocurrency exchange founded by the Winklevoss twins.

This situation was anticipated as there were concerns about the possibility of DCG defaulting on the loan or restructuring its debt, which is now being managed by Genesis’ bankruptcy estate. Gemini initially granted DCG a 30-day period to secure the necessary funds as part of a mediation process. The cryptocurrency exchange alleged that Genesis was responsible for the failure of its own interest-bearing lending product, Gemini Earn.

Genesis attorney told a U.S. bankruptcy judge in February that the agreement will see Barry Silbert-owned DCG exchange its outstanding $1.1 billion note due in 2023 for convertible preferred stock. The deal was part of Genesis’ bankruptcy plan agreed with its creditors that entails DCG refinancing its current 2023 term loans through new term loans issued in two tranches with an aggregate total value of approximately $500 million.

Under the restructuring agreement, this arrangement would either result in the sale of Genesis or turn over its equity to creditors, effectively bringing all entities under the same holding company. Additionally, Gemini will contribute up to $100 million to compensate Earn users with frozen assets and ensure that they will fully recover their funds.

Owing creditors at least $3.4 billion, Genesis had already halted most activity on its platform and froze customer redemptions on November 16, citing a liquidity crunch triggered by significant exposure to FTX.

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