The dispute between the twin brothers of cryptocurrency billionaire Winklevoss and Digital Currency Group (DCG) founder and CEO Barry Silbert has apparently ended, paving the way for the settlement of one of the largest bankruptcies in the cryptocurrency industry.
The agreement reached between the two parties is expected to bring an end to the months-long standoff. It comes after the dispute turned public and left 340,000 customers of the Winklevoss twins’ trust company, Gemini Trust, stranded with their funds frozen.
Creditors, including DCG and Gemini, representing those seeking $2 billion in claims against DCG’s bankrupt Genesis lending unit , have reached an agreement that includes DCG’s restructuring of approximately $1.7 billion in debt it owes Genesis and other liabilities. DCG will also give a stake in another venture, Genesis Global Trading, to its bankrupt Genesis lending unit.
The encryption exchange Gemini previously cooperated with Genesis on a high-yield product called “Earn”. Now, after reaching an agreement, it will provide Gemini Earn customers with $100 million, and the same value as the specific collateral previously obtained from Genesis Allocated to Earn customers whose funds were frozen along with the bankrupt Genesis.
” We’ve used our time well over the last two weeks ,” attorney Sean O’Neil, who is representing creditors, said Monday at a hearing on the deal, which still has to be approved by the bankruptcy judge overseeing the case.
Genesis, a subsidiary of cryptocurrency venture capital DCG , broke out after the exchange FTX went bankrupt last year, and filed for bankruptcy protection last month, becoming the latest to go bankrupt due to the collapse of cryptocurrency exchange FTX. company. Genesis suspended withdrawals in November, a move that left Earn users without access to hundreds of millions of dollars worth of cryptocurrency.
It also sparked a war of words between DCG and Gemini, with the Winklevoss brothers accusing Barry Silbert of being wrong and demanding his resignation as CEO.
However, on Monday, Cameron Winklevoss changed his tone, describing the agreement reached between the two parties as providing a path for Earn users to recover their assets.
Genesis said in January that the goal is to exit the bankruptcy court as soon as possible, and the document shows that it hopes to implement the reorganization plan before May 19. This timetable is much faster than that of bankrupt peers Voyager Digital and Celsius Network.
Genesis’ Chapter 11 bankruptcy documents show that the company owes more than $3 billion to the top 50 creditors, of which it owes at least $100 million to the seven largest creditors, and the largest creditor is a Gemini Earn customer, claiming $766 million.
In the debt master plan announced on the 6th, DCG is required to conduct a second . The mechanism consists of two tranches, one denominated in dollars and one in bitcoin . Currency pricing. The entire facility is worth the equivalent of $500 million and will mature in June 2024.
In order to honor the $1.1 billion promissory note owed to Genesis by parent company DCG, DCG will issue convertible preferred stock that will in the future be converted into common stock of DCG or DCG may form another subsidiary. Lawyers for Genesis said negotiations are ongoing.
“It simplifies the whole situation and allows more value to be rescued,” said Aaron Brown, a cryptocurrency investor who writes for Medium.
