Cameron Winklevoss, CEO of Gemini Earn, which owns $950 million in Genesis, has threatened to sue Digital Currency Group (DCG) after its subsidiary filed for bankruptcy.
“The decision to bankrupt Genesis does not absolve Barry, DCG, and any other wrongdoers from liability.”Winklevoss said.
He further stated that Barry Silbert, the founder of DCG, refused “Offering a fair deal to creditors”. Winklevoss said:
“We are preparing to take direct legal action against Barry, DCG and others who share responsibility for the fraud that affected more than 340,000 users.
Unless Barry and DCG make a fair offer to creditors, we will be filing a lawsuit against Barry and DCG soon. “
Winklevoss Accused Genesis, DCG and Barry Silbert were accused of fraud because they had placed a $1 billion promissory note from DCG with Genesis as the current asset.
silver, however, supports what “DCG has effectively assumed the risk of Genesis losing the Three Arrows Capital loan.”
Genesis is $2 billion in debt and filed for bankruptcy this week.
“We look forward to enhancing our dialogue with DCG and our advisors as we pursue a path to maximize value and provide the best opportunity for our business to be well-positioned for the future.”said Paul Aronzon, Genesis managing director.
The company claimed to have $150 million in cash, “Which will provide sufficient liquidity to support its ongoing business operations and facilitate the restructuring process.”
However, its liquidity problems may mean that creditors will be lucky to receive even 10% of the assets.
Furthermore, any lawsuit against Silbert and DCG will likely take at least two years or more to reach a conclusion.
The Grayscale Bitcoin Trust (GBTC), which holds 630,000 BTC, is unlikely to be affected as its trust structure protects assets, often even from bankruptcy.
Therefore, the bitcoin market did not react to this news, perhaps because Genesis stopped withdrawals in November and it became clear weeks ago that they were bankrupt.
So, it is likely that this news has already been priced in, but now that it is official, it may close the chapter on many cryptocurrency bankruptcies in this bear market.