Syed Imran Haider 
Winklevoss Twins, Silbert Settle in Crypto Bankruptcy Case
Barry Silbert is the CEO of Digital Currency Group and Cameron and Tyler Winklevoss are crypto industry billionaires. The dispute between them has reportedly been resolved.
This has resulted in a potential resolution of one of the biggest bankruptcies in the industry’s history. The agreement may bring closure to a prolonged conflict that turned into a public feud.
It caused uncertainty for hundreds and thousands of customers of the Winklevoss twins’ Gemini Trust Co.
DCG and creditors, who hold claims worth $2 billion against the bankrupt Genesis lending division, have come to an agreement. DCG will restructure around $1.7 billion of its debt and other liabilities owed to Genesis.
The company will provide equity interest in another unit, Genesis Global Trading, to the lending division. Gemini has participated in the development of the high-yield product called Earn with Genesis.
The exchange will invest up to $100 million of its own funds. They will also share the value of certain collateral obtained from Genesis with Earn consumers.
Sean O’Neil is a lawyer for the creditors. As per Neil, they have made good use of the time given to them over the past two weeks.
The agreement was first presented during a hearing on Monday. The bankruptcy judge overseeing the case still needs to approve the agreement before it can be implemented.
Last month, Genesis Global Holdco filed for bankruptcy. They became the latest company affected by the collapse of the cryptocurrency exchange FTX.
In November, the lender stopped withdrawals, causing Earn users to be unable to access crypto assets. This led to a stalemate and escalated into a dispute.
The dispute was with the Winklevoss twins accusing Silbert of making false statements and calling for his removal as CEO.
On Monday, Cameron Winklevoss expressed a more optimistic view. He acknowledged that the agreement is enabling Earn users to retrieve their assets.
Meanwhile, DCG announced through a spokesperson that they have been actively collaborating with Genesis and its creditors.
They further stated that they are glad to support Genesis in reaching this agreement with all participating creditors.
Investors who participated in the Earn program were previously able to earn an interest rate of up to 8% on their digital coins.
This was through an arrangement in which the program would loan the coins to Genesis.
In January, Genesis stated its intention to request a prompt discharge from the bankruptcy court. Upon filing for bankruptcy, the company had already established a comprehensive restructuring plan.
If this timeline is upheld, the process would be significantly faster compared to other crypto firms that have undergone bankruptcy.
Genesis Chapter 11 Filing Details $3B Debt to Top Creditors
In its Chapter 11 filing, Genesis revealed it owed over $3 billion to its top 50 creditors.
They also owe seven creditors with claims exceeding $100 million. The largest claim, totalling $766 million, was related to Gemini Earn customers by a substantial amount.
In order to comply with the recently announced debt restructuring, DCG must restructure its almost $600 million in loans to Genesis.
The facility is valued at about $500 million and maturing in June 2024. It will require the parent company to issue convertible preferred stock that can convert into common equity.
The common equity can be in DCG or a subsidiary agreed upon to pay a $1.1 billion promissory note owed to Genesis by DCG. Negotiations are ongoing, according to a Genesis lawyer.
Aaron Brown is a cryptocurrency investor. He said that the recently announced agreement helps to streamline the situation and increase the chances of recovering more value.
However, he notes that the challenge remains that the value of assets is far from equal to the liabilities. He also mentioned that this deal does not change that.
Instead, it makes it easier for the surviving parties to acknowledge the losses, divide the remaining value, and move forward. Despite the agreement, there will still likely be numerous legal disputes.
