Gemini co-founder angrily reprimands DCG founder: Liars pay back quickly

Author: 0xmin Translation: Shenchao TechFlow

On July 4th, Gemini co-founder Cameron Winklevoss issued an open letter to DCG founder and CEO Barry Silbert, angrily accusing Barry of delaying in compensating the $1.2 billion owed to 230,000 Earn users, and having a bad attitude, delaying and abusing adjustment procedures To deceive creditors, and shamelessly stated that he was the victim. Winklevoss said he couldn’t take it anymore and issued an ultimatum. If he does not agree, he will file a lawsuit against DCG and himself on July 7.

The following is the full text of the open letter to Barry Silbert:

Barry, today is 229 days since Genesis stopped withdrawals and 174 days since my last open letter to you. As a reminder, I am writing to you on behalf of the 232,000 Earn users who have over $1.2 billion in assets trapped in Genesis, a company owned and controlled by Digital Currency Group (DCG), which in turn is owned and controlled by you.

As you know, DCG businesses have been engaging in fraudulent practices. As its leader, you cultivated and engineered a culture of lies and deceit, many of which are now well documented in the public record.

Shockingly, when I detail how you, your employees, and DCG conspired to make multiple false and misleading statements to creditors, including falsifying balance sheets and other documents, in order to conceal the bankruptcy and financial condition of Genesis, But you did not directly address or refute any of these.

Instead of explaining what I did wrong or what I might have misunderstood, you sidestepped the question entirely and responded in the most cryptic way possible, writing a letter of utter disregard and narcissism to your shareholders.

On January 10th, you write to your shareholders (some of whom are also creditors you have duped) explaining to them and the world how your feelings have been hurt.

The first full thought of your nearly 4,000-word letter, “I’ve been doing quite a bit of reflection on the past year lately…”, is a good sign. However, despite a promising start and all your professed reflection, you somehow forgot to address the multibillion dollar elephant in the room - DCG Corporation owes $3.3 billion to creditors (of which $1.2 billion is owed to Earn users ).

You have not apologized for the stress, anxiety and pain you have caused them and their families. And no apology for the havoc you have caused our entire industry. However, you did tell everyone, “This past year has been the most difficult of my life”.

At first glance, your letter may seem like a master class in the lack of self-awareness. After all, it’s a little strange to write a letter and not address the allegations that prompted you to write it. However, upon further inspection, your letter is another well-crafted act of folly, entirely to pass the buck, play dumb to buy time, and try to entrap creditors and Earn users again, allow me to explain.

After nearly 8 months of talking to you, your lawyers, and your advisors, one thing has become abundantly clear. **You also never intended to do the right thing and take responsibility for the chaos you, your company and your employees created with your reckless and fraudulent actions. **

Instead, you spent the last 8 months buying time so you could raise funds and standoff creditors and Earn users again. Let me break down your own game for you.

**Perform deception. **During June and July 2022, you, DCG and Genesis deliberately lied to creditors Ean users and Gemini to make us all believe that DCG had absorbed Genesis two months ago, in May due to Three Arrows Capital ( 3AC) in losses of $12 billion.

In fact, instead of absorbing the losses, DCG signed a fake long-term promissory note to make it look like it did so without sending Genesis a dime, the deal was not in good faith . You hope everyone doesn’t notice, but unfortunately, a man named SBF shows up and commits an even bigger scam, exposing your scam.

**Refused to pay promissory note. **At this point, the correct course of action should be for you and DCG to actually absorb the $1.2 billion in losses, or to come to an agreement with creditors to restructure the duration and amount of holiday tickets in a way that is legal, fair and reasonable for all . You chose to do neither. Instead, you pretend to have been through the negotiation process in an effort to win over dumb creditors and keep DCG litigating the viability of the promissory notes in court for many years to come.

** Raised funds to repay $630 million in loans. **Delay is critical because it gives you time to work out the block - DCG owes Genesis $630M. This loan is the sword of Damocles hanging over your head, and unlike the FuGazi promissory notes that are due in 10 years, this loan is due in May of this year, and failure to pay this loan will result in Cause DCG to default and go bankrupt.

So you’ve been working feverishly since November, not to get creditors compensated, but to raise funds so that you can repay this loan and litigate the promissory note freely and clearly for the next ten years. You haven’t given up yet, pushing for a better deal anyway. To you, Earn users aren’t people, they’re numbers on a spreadsheet, business as usual, bro.

** Misuse of Mediation Process. **By May 1st, DCG didn’t have $630 million and was about to fall off a cliff. Faced with your second default and second bankruptcy in less than 6 months, you seek mediation to buy time, and creditors reluctantly agree to give you one last chance.

Mediation can be very effective mechanisms as long as they function properly, with clear structures, strict deadlines and real consequences.

Eight weeks later, after multiple extensions, there is still no deal. Why? Because the mediation gave DCG an indefinite stay of paying the $630 million it owed Genesis, free of charge. This gratuitous withholding of payments severely harms creditors and Earn users in two very important ways.

First, it rejected $630 million owed to creditors, including Earn users, in May. Second, it completely destroys a key bargaining chip for creditors and Earn users, which is to get you to the negotiating table to pay for the bogus acceptance and avoid protracted, scorched-earth litigation for it.

The game is over, I am writing to inform you that your game is over.

In addition to the delay in settlement, the related costs exceeded 100 million US dollars, all of which went to lawyers and consultants at the expense of creditors and money earners, which is enough.

To this end, we have attached a best and final proposal that is fair and reasonable to each and represents the minimum that will be acceptable to creditors asked to support the transaction.

If you do not agree to this deal by July 6 at 4pm ET, we will take the following steps:

SUIT FILE AGAINST DCG AND YOU INDIVIDUALLY: The lawsuit will be filed on July 7th. Among other things, it will outline your personal responsibility for concealing the bankruptcy of Genesis and provide a blueprint for the 232,000 Earn users to file similar lawsuits against you and DCG.

FILE A WORKAROUND MOTION: We will be asking the Genesis Special Committee to fulfill its fiduciary duty to file a rollback motion on or before July 7th, placing DCG in default and demanding immediate payment of what you owe to creditors and Earn users The payment of $630 million cannot be delayed any longer.

Advancement of a non-consensus plan: We will work with the Genesis Special Committee to advance a non-consensus plan that adheres to a strict timeline and stipulates

Immediately distributed to creditors and Earn users, DCG’s contribution will be sued.

UCC** LITIGATION:** We will ask the Unsecured Creditors Committee (UCC) to fulfill its fiduciary duty to litigate and collect evidence in connection with the investigation of various intercompany loans and transactions between DCG and Genesis entities.

Gemini looks forward to working with the Genesis Special Committee to conclude the mediation process and move forward with the bankruptcy process in order to bring relief to Earn users as soon as possible.

Finally, I have seen a lot of bad behavior from you and your colleagues over the past 9 months, but most disturbing is what you said to me this fall, **You are the victim of it all. **

It takes a special kind of “person” to owe $3.3 billion to hundreds of thousands of people and believe or at least pretend to believe they are victims, and not even SB is capable of such delusions. In the end, he at least recognizes how his actions hurt others and tries to make things right. I can confidently say, and I speak for all Earn users, it’s time for you to do the right thing.