DCG’s Dilemma: Should It Sell Its GBTC Holdings to Repay Gemini?

Gemini has accused Digital Currency Group CEO Barry Silbert of fraud after allegedly misrepresenting the financials of his company. The accusations follow a dispute over the return of $900 million in assets owed to Gemini Earn’s users. Karim Dandashy, CFA and portfolio manager at XBTO Group, discusses everything about the ongoing drama between Genesis, its parent company DCG, and Gemini. 

Show highlights:

• the fraud accusations against DCG CEO Barry Silbert
• all the details disclosed in Barry’s response
• whether Genesis will file for chapter 11 bankruptcy protection
• the meaning of the $1.1 billion promissory note being not callable
• the EDNY and SEC investigation on transfers between DCG and a subsidiary – potentially Genesis
• whether the 1% interest rate charged for the loan was suitable considering the nature of Genesis’ business
• whether DCG could sell its venture investments to plug the hole
• why Bitvavo rejected an offer from DCG to return 70% of the $300 million owed to them
• what Karim would do if he was leading DCG 

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Guest

Karim:

• Twitter
• LinkedIn

Previous coverage of Unchained on DCG and Genesis: 

• Gemini vs. DCG Is Heating Up. Could Gemini Force Genesis Into Bankruptcy?
• ‘The Last Big Whale’: Why the Crypto Contagion of 2022 Eventually Hit Genesis
• Adam Cochran on Why Crypto Prices Will Be Down Bad for the Next Six Months
• Is the Collapse of Crypto Lending Over, or Is It Just Starting?
• The Chopping Block: SBF Wants to Win in the Court of Public Opinion. Will He?

Genesis/Gemini:

• Unchained:
  • Gemini Ends Its Earn Program and Calls for Barry Silbert’s Ouster
  • DCG Under Investigation by DOJ and SEC: Report
  • Genesis CEO Says Firm Needs More Time to Find a Solution
  • ​​Gemini Co-Founder Accuses DCG’s Barry Silbert of ‘Bad Faith and Stall Tactics’ 
  • Genesis Warns of Bankruptcy If Funding Plans Fail: Report
• Financial Times: DCG’s crypto broker Genesis owes creditors more than $3bn
• Protos: Scoop: Larry Summers gives up advisory role at crypto firm DCG amid criticism
• CNBC: Crypto firms Genesis and Gemini charged by SEC with selling unregistered securities
• Forbes: Gemini Faces Class-Action Lawsuit Over Unregistered Interest-Bearing Accounts
• Decrypt:
  • Dutch Bitcoin Exchange Bitvavo Says DCG’s Payback Plan ‘Not Acceptable’ 
• Sam Andrew’s thread
• Ram Ahluwalia on DCG CEO’s update to shareholders
• Ryan Selkis on the definition of the current assets