Su claims that the company’s value should be zero because it is a fraud and has no assets.
Digital Currency Group reportedly lost $175 million in the wake of the FTX collapse, and CEO Barry Silbert recently received an ultimatum letter from Cameron Winklevoss—of Gemini cryptocurrency exchange, who demanded that he address customer funds locked up by the failed trading system.
Gemini engaged Genesis in a lending scheme. But due to the collapse of FTX and the pressures from an ongoing bear market, on November 16th, 2022 Genesis suspended all customer withdrawals.
Gemini customers were left without access to their funds, and it’s unclear when or whether they will be able to recover these investments.
Zhu Su believes creditors will file bankruptcy petitions against Genesis and DCG in the coming days; here’s what he had to say about Digital Currency Group:
4) instead they fabricated a left pocket right pocket callable promissory note that magically filled the hole. This is like a kid losing at poker and saying “I am fine, my dad will pay you, let me keep playing,” but if your dad is actually yourself
— Zhu Su 🔺 (@zhusu) January 3, 2023
5) they, like FTX, proceeded to misdirect for months, using various methods to attack us and also not have anyone ask the hard questions which is how did genesis fill the hole
6) they, like FTX, spent six months taking more deposits while insolvent and hoping mkt goes up
— Zhu Su 🔺 (@zhusu) January 3, 2023
Crypto Potato writes:
Zhu, who was recently claimed to have been on the run, also accused DCG and FTX of misdirecting for months and using different techniques to attack the hedge fund. He further alleged that the two companies raked in more deposits while being insolvent in anticipation that the market would go up.
9) Genesis creditors will push it into bankruptcy and take remaining dcg assets in coming days either way, they are likely demanding Barry pays back his cashouts the easy way instead of waiting for a DoJ criminal case with restitution punishments
— Zhu Su 🔺 (@zhusu) January 3, 2023
One missing piece from this analysis is that by some accounts various tradfi firms shorted USDT v USD using Genesis
This can be relevant if these loans were unable to be novated in time to solvent lenders
Such creditors could have preferential claim on remaining dcg liquidity https://t.co/nOXrIpUlVn pic.twitter.com/D7Km7dRJPF
— Zhu Su 🔺 (@zhusu) January 1, 2023
CoinDesk reports via MSN News:
The co-founder of Gemini has accused DCG CEO Barry Silbert of “bad faith stall tactics” as their companies lock horns over a business disagreement precipitated by crypto exchange FTX’s multibillion-dollar implosion late last year.
Cameron Winklevoss blasted Silbert in an open letter posted to Twitter, alleging that crypto broker Genesis Global Capital and DCG owe Gemini’s clients $900 million.
The letter alleges Gemini has awaited word on a repayment agreement for six weeks to no avail. In response, Silbert said his firm submitted a proposal to Genesis and Gemini’s advisers last Thursday.
