Cameron Winklevoss, co-founder of the cryptocurrency exchange Gemini, published an open letter to Digital Currency Group (DCG) CEO Barry Silbert on Jan. 2, 2022, stating that it had been 47 days since withdrawals from Genesis had been halted. In the letter, Winklevoss claimed that DCG owes $1.675 billion to Genesis. Silbert, however, responded on social media, denying the claim.
Gemini Co-Founder Publishes Open Letter to DCG Chief Executive Barry Silbert Demanding He Resolves Liquidity Issues by Jan. 8, 2023
Gemini co-founder Cameron Winklevoss shared an open letter on Twitter on Monday in hopes to get Digital Currency Group (DCG) CEO Barry Silbert’s attention. Winklevoss says in the letter that he wrote it on behalf of 340,000 Gemini Earn users. “These users are not just numbers on a spreadsheet, they are real people,” Winklevoss declared. Basically, Gemini offered Earn users as much as 8% interest on specific digital assets and it managed to do so because Genesis Global Capital’s lending arm was a key partner.
— Cameron Winklevoss (@cameron) January 2, 2023
However, the FTX contagion spread to Genesis, a creditor in the FTX bankruptcy proceedings, and the company’s lending unit halted withdrawals and loan originations in mid-Nov. 2022. While Genesis was a key partner for Gemini’s Earn product, it too paused withdrawals the same week. Then the Financial Times (FT) published a report that alleged Genesis owed Gemini Earn users $900 million. Gemini also formed a creditors committee to retrieve the funds from Genesis with Houlihan Lokey as a financial advisor.
Additionally, upset customers are preparing a potential class action lawsuit against Gemini that alleges the exchange of defrauding customers with a bad deal. In the open letter, Winklevoss claims that his team tried to solve the issue with Silbert on multiple occasions and on Dec. 25, 2022. The letter says that the issue is a mess “entirely of your own making,” as Winklevoss accuses DCG of owing Genesis $1.675 billion.
“Every time we ask you for tangible engagement, you hide behind lawyers, investment bankers, and process,” the Gemini co-founder explained in the letter. Winklevoss further insisted that the funds were used to “fuel greedy share buybacks, illiquid venture investments, and kamikaze Grayscale NAV trades.” The Gemini co-founder further added:
It’s not lost on us that you’ve been working desperately to try and firewall DCG from the problems that you created at Genesis. You should dispense with this fiction because we all know what you know — that DCG and Genesis are beyond commingled.
After Winklevoss published his tweet, the DCG CEO responded to the claims that were made. “DCG did not borrow $1.675 billion from Genesis,” Silbert tweeted. “DCG has never missed an interest payment to Genesis and is current on all loans outstanding; next loan maturity is May 2023. DCG delivered to Genesis and your advisors a proposal on December 29th and has not received any response.”
Winklevoss then asked the DCG executive if he would “commit to solving this by January 8th in a manner that treats the $1.1 billion promissory note as $1.1 billion.” Silbert did not respond to Winklevoss’ final tweet about committing to a resolution by that day. The open letter to Silbert also demands that the issue gets resolved by Jan. 8, 2022.
The DCG executive’s last tweet on Dec. 19, 2022, shared an article about the DCG subsidiary Grayscale Investments possibly providing investors with a tender offer if the Bitcoin Trust’s exchange-traded fund (ETF) goals failed. In that specific tweet, someone asked Silbert how he was doing, and the DCG CEO responded:
Looking forward to getting this year behind us.
What do you think about the issues between Gemini’s co-founder Cameron Winklevoss and Barry Silbert over liquidity issues between Gemini and Genesis? Let us know what you think about this subject in the comments section below.