Digital Currency Group (DCG) founder and CEO Barry Silbert had put forth a proposition for a potential merger between Genesis and Gemini, as revealed in recent court documents dating back to 2022. At that time, DCG held ownership of the now-defunct crypto lending platform Genesis. The envisioned “commercial partnership” aimed to position the combined entity as a formidable competitor against established cryptocurrency exchanges like Coinbase and FTX. The long-term strategy included taking the unified company public within two years post-merger, following a fundraising target of $500-1 billion.
In the correspondence, Silbert expressed optimism about the synergies that could be unlocked through the consolidation of the two entities, foreseeing the possibility of creating a dominant force in the market. Silbert initially presented the merger proposal to Cameron Winklevoss in 2022, with plans for further discussions involving Cameron’s brother, Tyler Winklevoss, to strategize the optimal path forward.
An email exchange from DCG’s Barry Silbert, submitted as evidence in a filing with the Supreme Court of the State of New York in October 2022, shed light on the deliberations surrounding the proposed merger.
Genesis and Gemini had previously collaborated on an “Earn” program, enabling users to accrue interest on their cryptocurrency holdings. However, complications arose when Genesis suspended customer withdrawals in November 2022. Subsequently, in January 2023, Genesis Global initiated Chapter 11 bankruptcy proceedings in New York, citing a need to secure $1.1 billion on behalf of participants in its Earn program.
Notably, Gemini exchange had withdrawn approximately $280 million from Genesis Global shortly before the latter imposed restrictions on customer withdrawals, leading to its eventual bankruptcy filing. The situation escalated further as both Genesis and Gemini faced legal allegations from the U.S. Securities and Exchange Commission in January 2023, accusing the Earn program of facilitating an unregistered sale of securities.
In a significant development, DCG announced in January that it had successfully resolved debts exceeding $1 billion, including a substantial sum of nearly $700 million owed to its distressed subsidiary, Genesis. Barry Silbert shared this milestone update on the social media platform X, marking a pivotal moment in the debt settlement process initiated post-Genesis’s legal action against DCG and its affiliate, DCG International Investments (DCIG), in September.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
