Key Takeaways:
- DCG failed to make a $630 million payment owing to Gemini
- If a deal cannot be achieved, Gemini and other stakeholders are putting out a modified reorganization plan with Genesis that doesn’t need DCG’s permission.
Digital Currency Group (DCG) failed to make a $630 million payment owed to Gemini, which set off a chain of events that brought attention to the Bitcoin market.
After Genesis, a DCG entity, filed for Chapter 11 bankruptcy based on claims of mixed money and continued disagreements over loan repayments, Gemini CEO Cameron Winklevoss threatened to sue DCG CEO Barry Silbert and DCG. The lawsuit would be related to the payback of a $900 million loan.
Through their Earn program, the U.S. Securities and Exchange Commission (SEC) has charged both companies with marketing unregistered securities.
They now find themselves in the public eye as the issue has swiftly gotten worse. In an update on its website, Gemini said that while it and DCG are in talks, if a deal cannot be achieved, Gemini and other stakeholders are putting out a modified reorganization plan with Genesis that doesn’t need DCG’s permission.
It is uncertain whether the parties will agree, even though talks are still happening. If they do, their decision will depend partly on whether they think DCG would negotiate in good faith for a mutually agreeable outcome.
Cameron Winklevoss, a co-founder of Gemini, accused DCG CEO Barry Silbert in public of using “bad faith stall tactics,” which stoked the situation even more. Gemini is preparing to submit a claim to Genesis to restore more than $1.1 billion in digital assets on behalf of its more than 200,000 Earn users.
Industry insiders and investors have been keenly following the issue to see how it develops and what effects it would have on the overall Bitcoin market.
The matter may take some time to resolve because Genesis’ attorneys late last week asked the Bankruptcy Court of the Southern District of New York to extend the time they had to submit a Chapter 11 plan and seek acceptances.
Meanwhile, many are urging greater accountability and transparency in the sector, contending that occurrences like this erode faith in cryptocurrencies and the businesses that operate in this area.
A platform for derivatives would soon be launched outside of the United States, Gemini announced in April. The action is being conducted in the middle of a tight regulatory environment and getting more ambiguous across the nation.
