According to court documents, a 2022 email exchange between Barry Silbert, founder and CEO of Digital Currency Group (DCG), proposed a potential merger between Genesis and Gemini. This merger would create a strong competitor to major crypto exchanges like Coinbase and FTX. The plan also included the possibility of taking the merged entity public within 24 months and raising $500-1 billion.
Silbert shared this proposal with Cameron Winklevoss in 2022, who planned to discuss it with his brother, Tyler Winklevoss, to determine the next steps. The potential merger between Genesis and Gemini was seen as a way to form a powerful team.
The two companies had previously collaborated on the “Earn” program, which allowed customers to earn interest on their cryptocurrency holdings. However, the program faced difficulties and resulted in Genesis freezing customer withdrawals in November 2022. In January 2023, Genesis filed for Chapter 11 bankruptcy protection in New York, seeking $1.1 billion for its “Earn” program users. It was reported that Gemini had withdrawn approximately $280 million from Genesis before the freeze and bankruptcy filing.
In addition to the bankruptcy, both Genesis and Gemini faced allegations from the U.S. Securities and Exchange Commission (SEC) in January 2023. The SEC claimed that the “Earn” program was an unregistered sale of securities.
Meanwhile, DCG announced in January that it had successfully settled over $1 billion in debt, including a substantial amount owed to its bankrupt subsidiary, Genesis. This milestone was shared by Barry Silbert on the Xplatform, highlighting a significant achievement for DCG. The debt settlement process began after Genesis filed a lawsuit against DCG and its affiliate, DCG International Investments (DCIG), in September. These events shed light on the complex dynamics within the cryptocurrency industry.
