Time is running out for Digital Currency Group to agree on a deal to restructure its bankrupt crypto lending unit Genesis after its largest creditor Gemini - the crypto company founded by the Winklevoss twins - set Thursday afternoon as the final deadline before the company pursues litigation.
The lending unit of crypto firm Genesis filed for bankruptcy in January after the collapse of key counterparties including FTX caused it to freeze customer redemptions in November. Genesis is owned by venture capital firm Digital Currency Group (DCG).
Although Genesis' lending unit had initially outlined a plan to exit bankruptcy by May, it has yet to reach an agreement on a restructuring plan with creditors, to whom it owes more than $3 billion, according to court filings.
Its largest creditor is Gemini, founded by billionaire identical twins Cameron and Tyler Winklevoss who are also former U.S. Olympic rowers. Gemini is seeking to recoup more than $1.1 billion.
In a letter to DCG CEO Barry Silbert that Cameron Winklevoss tweeted on Monday, Winklevoss shared what he called his “best and final offer,” and said the deadline for DCG to agree to the proposal was 4 p.m. EDT (2000 GMT) on July 6.
"No extensions and no more delay. It is a simple yes or no," Winklevoss told Reuters in a statement.
DCG declined to comment. Lawyers for Genesis did not immediately respond to a request for comment. DCG had called a previous open letter from Winklevoss earlier this year a "publicity stunt" to "to deflect blame from himself and Gemini."
The bankruptcy has brought some of the most powerful and high-profile crypto industry personalities into direct conflict, and is being closely watched by the crypto market.
The Winklevoss twins shot to fame after they sued Meta Platforms (META.O) founder and CEO Mark Zuckerberg, alleging he had stolen their idea for Facebeook. They agreed to a settlement in 2008 in which they received cash and Facebook stock.
Connecticut-based DCG has a formidable portfolio of companies — over 200 in more than 35 countries, Silbert told shareholders earlier this year. It owns crypto asset manager Grayscale as well as crypto news and events site CoinDesk.
A bankruptcy court appointed a mediator in April to help Genesis, DCG and its creditors agree on a restructuring plan, but the parties have yet to reach a deal despite several extensions. The latest mediation period expired on Wednesday.
Winklevoss’ restructuring proposal includes a $275 million forbearance payment, a $355 million debt tranche due in two years, and a $835 million debt tranche due in five years. Under the offer, DCG would retain the proceeds from the sale of Genesis' lending unit.
If Silbert and DCG do not agree, Gemini will sue Silbert and DCG, and file a motion to place DCG in default and demand immediate debt repayments, Winklevoss said.
“This proposal is fair and reasonable for everyone,” Winklevoss said in the letter.
