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Cameron Winklevoss, the co-founder of the crypto exchange Gemini, has issued a warning to Barry Silbert and the Digital Currency Group (DCG), stating that a lawsuit will be filed on July 7 if they fail to accept the creditors’ ‘best and final offer.’ Winklevoss has also expressed his intention to work with the Genesis Special Committee (GSC) to develop a non-consensual plan that ensures timely and immediate distributions to creditors and Earn Users.
‘Indefinite Forbearance’
In an open letter shared on Twitter, Winklevoss accused Silbert of deliberately delaying the resolution process regarding DCG’s failure to compensate creditors. He emphasized that if DCG refuses to accept the final offer, a demand will be made for the GSC to file a turnover motion on or before July 7, resulting in DCG defaulting on its obligations.
Winklevoss’s letter serves as his latest criticism directed at DCG and its founder. In May, Gemini had alleged that DCG had failed to make a payment worth around $630 million, indicating their willingness to extend forbearance to prevent a default.
However, in his recent letter, Winklevoss specifically blamed Silbert’s misuse of the mediation process for this escalation. He argued that DCG has been enjoying an indefinite forbearance, at the cost of the creditors and Earn Users.
He stated, ‘The mediation has given DCG an indefinite forbearance on the $630 million it owes Genesis – for free. This gratuitous forbearance has seriously damaged creditors and Earn Users in two significant ways. First, it has denied creditors, including Earn Users, the $630 million that they were owed in May.’
Unsecured Creditor Committee’s Fiduciary Duties
Winklevoss also pointed out that DCG’s continuous forbearance has weakened the position of the creditors and Earn Users, discouraging Silbert from engaging in negotiations.
In addition to threatening legal action and filing a turnover motion, Winklevoss expressed his commitment to collaborate with the GSC in formulating a non-consensual plan that adheres to a strict timeline and guarantees immediate distributions to creditors and Earn Users. He demanded that the Unsecured Creditor Committee (UCC) fulfill its fiduciary duty by filing a lawsuit and conducting depositions related to their investigation into the intercompany loans and transactions between DCG and Genesis entities.
According to the ‘best and final offer,’ DCG is required to make a payment of $275 million, comprising 4,632 BTC and U.S. dollars, as forbearance on or before July 21. Additionally, a payment of $355 million, referred to as Debt Tranche 1, must be made within two years from the effective date of the plan support agreement (PSA). Finally, an amount of $835 million must be paid within five years from the effective date.
