May 22, 2023 - Economy

Gemini says Digital Currency Group missed loan payment

Illustration of a crypto coin glowing atop a pile of receipts

Illustration: Natalie Peeples/Axios

Gemini's tussle with Digital Currency Group over debts unpaid appear to be coming to a head.

Driving the news: The crypto exchange founded by Cameron and Tyler Winklevoss said that Barry Silbert's DCG did not pay roughly $630 million due last week, according to a statement published Friday on Gemini's website.

The intrigue: Gemini, along with DCG unit Genesis and two different groups of creditors involved in Genesis's bankruptcy proceeding, are considering providing "forbearance" or temporary financial relief for DCG — that is if "the parties believe it will engage in good faith negotiations on a consensual deal."

  • Otherwise, Gemini and Genesis will come up with a different plan for reorganization without DCG's "consensual participation," the crypto exchange said.
  • Genesis in an emailed statement to Axios said that it was "working collaboratively" to address Digital Currency Group’s nonpayment.

Context: DCG, its unit Genesis Global Capital and Gemini have been locked in contention since FTX's collapse, which caused something of a chain reaction that put retail investors in the Winklevoss twins' crypto exchange Earn program in the lurch.

  • Catch up quick: Genesis and Gemini are teaming up against DCG, with talks around a previously floated restructuring plan stalled.
  • Laura Shin of the Unchained podcast earlier this month said mediation was out of the question, citing sources close to the matter.

The other side: "DCG continues to be engaged with the various stakeholders in the Genesis Capital restructuring process pursuant to the 30-day mediation period entered into by all parties on May 1," a DCG spokesperson said in a statement.

Quick take: The debtor of my debtor is my friend.

Editor's note: This report has been updated to include a statement from Genesis.

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