Gemini accuses DCG of ‘gaslighting’ Genesis creditors
Gemini believes that Gemini lenders will not “receive anything close in real value” under current terms
24K-Production/Shutterstock modified by Blockworks
Gemini is accusing Digital Currency Group of “gaslighting” Genesis creditors and making “misleading, and inaccurate assertions.”
Gemini and DCG have engaged in a legal back-and-forth as Gemini opposes a plan put forth by Genesis and DCG, though DCG claims that its plan would make Gemini Earn customers whole.
Gemini claims that DCG is trying to “bait the Gemini Lenders into accepting a deal that would allow DCG to pay far less than it owes. Indeed, the shoulder-to-shoulder opposition to the DCG ‘deal’ by Gemini, the Ad Hoc Group, and the Fair Deal Group demonstrates the inadequacy of DCG’s proposed contribution.”
Gemini takes issue with the proposed plan by DCG and Genesis because it believes that the agreement in principle does not ensure that DCG “pays a just and adequate amount.”
As part of its filing, Gemini pushes for DCG to pay over $630 million, as part of a missed loan payment back in May, instead of the proposed payment plan which would see DCG pay $275 in installments and issue a note payable over two years for $328 million.
“DCG cannot plausibly deny that, as a matter of ‘rudimentary financial principles,’ paying $604 million over two years is not the value equivalent of paying what it was obligated to pay four months ago,” the filing said.
In a statement earlier this week, DCG argued that Gemini Earn users would be made whole through the proposed plan, estimating returns of 95-100%.
Read more: Gemini Earn users could be made whole through plan, DCG says
DCG further noted that, if Gemini were to “agree to provide $100 million to Gemini Earn users under the Proposed Agreement, as it previously did, there would be little doubt Gemini Earn users would receive more than full recovery.”
“It is DCG’s fault that Genesis is unable to repay the loans that the Gemini Lenders made directly to Genesis,” Gemini argued.
Unsecured creditors could expect a recovery of up to 90% as part of the plan, according to DCG. Additionally, the returns would have a “meaningful portion of the recovery in digital assets.”
Gemini and DCG are locked in a lawsuit currently, with Gemini claiming that both DCG and its CEO Barry Silbert “aided and abetted Genesis in making fraudulent misrepresentations to Gemini with respect to Genesis’s financial condition and the support it received from DCG.”
DCG filed a motion to dismiss in August, claiming that the suit is filled with “misrepresentations.”
DCG declined to comment on the statement.
Get the news in your inbox. Explore Blockworks newsletters:
- The Breakdown: Decoding crypto and the markets. Daily.
- 0xResearch: Alpha in your inbox. Think like an analyst.
