In recent court documents, an email exchange from 2022 brought an interesting proposal from Barry Silbert, founder and CEO of Digital Currency Group (DCG), suggesting a potential merger between Genesis and Gemini.
DCG, the owner of the bankrupt Genesis, considered a “commercial partnership” aimed at competing with major crypto exchanges like Coinbase and FTX. The ambitious plan included taking the merged entity public within 24 months, with the possibility of raising $500-1 billion.
In the email exchange, Silbert suggested combining Genesis and Gemini could make a powerful team. Silbert shared this proposal with Cameron Winklevoss in 2022, who planned to discuss it with his twin brother, Tyler Winklevoss, to figure out the next steps.
Genesis and Gemini had jointly introduced an “Earn” program, enabling customers to earn interest on their cryptocurrency holdings. However, the program faced setbacks, leading Genesis to freeze customer withdrawals in November 2022.
In January 2023, Genesis Global took a significant step by filing for Chapter 11 bankruptcy protection in New York, seeking $1.1 billion for its Earn program users. Notably, Gemini reportedly withdrew approximately $280 million from Genesis shortly before the freeze and bankruptcy filing.
Adding to the complexity, Genesis and Gemini faced allegations from the U.S. Securities and Exchange Commission (SEC) in January 2023. The regulatory body claimed that the Earn program constituted an unregistered sale of securities.
In a separate finding, DCG announced in January that it successfully settled over $1 billion in debt, including a substantial amount owed to its bankrupt subsidiary, Genesis.
However, Barry Silbert shared this milestone on the Xplatform, marking a significant achievement for DCG. The debt settlement process began after Genesis filed a lawsuit against DCG and its affiliate, DCG International Investments (DCIG), in September. These revelations shed light on the complex dynamics within the crypto industry.
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