Cameron Winklevoss, co-founder of Gemini Trust Co., is accusing fellow cryptocurrency asset entrepreneur Barry Silbert of “bad faith stall tactics” in relation to the more than a month-long freezing of over $1 billion worth of customer assets.
In an open letter posted to Twitter, Winklevoss, 41, said that Silbert, CEO of Digital Currency Group, has been delaying the delivery of funds owed to users of Gemini’s Earn program for over a month.
Under the Earn program, investors leased cryptocurrency assets to Gemini in exchange for interest payments of up to 8%. Gemini then lent these assets to Genesis Global Capital, one of Digital Currency Group’s subsidiaries.
Cameron Winklevoss (L), age 41, has publicly requested that fellow cryptocurrency businessman Barry Silbert refund his customers’ monies, which were presumably lost when FTX collapsed in November. This image depicts him rowing for Oxford University.
Winklevoss, who operates Gemini Trust Co., a cryptocurrency exchange, has customers who owe $900 million to Genesis, a subsidiary of DCG.
Genesis banned withdrawals at the beginning of November in response to the demise of crypto-trading firm FTX. According to reports, Genesis had outstanding loans to FTX’s sibling company, Alameda Research, and froze all transactions citing its implosion.
This suspension has triggered a liquidity problem for Gemini, which the Winklevoss twins appear to be battling in real time via a Twitter war.
Tyler and Cameron Winklevoss co-founded Gemini in 2014 and became cryptocurrency Evangelists with a $4 billion net worth at the pinnacle of the cryptocurrency market.
As a result of the so-called Crypto winter and subsequent implosion of FTX and its market ripples, each twin’s net value has decreased significantly and is now at $1 billion.
Midway through 2022, Silbert’s projected net worth, mostly amassed thanks to his crypto-empire, was believed to be $3.2 billion, a figure that has likely decreased significantly in light of recent events.
In the letter he published on Monday, Winklevoss accused Silbert of regularly avoiding Gemini executives over the past month and a half and refusing to establish a repayment plan for the $900 million Gemini loaned Genesis.
Investors sued Gemini and Tyler and Cameron Winklevoss for fraud and offering interest-bearing accounts without registering them as securities last week.
Winklevoss alleged that Digital Currency Group owed Genesis $1.675 billion, which could have been used to repay Gemini and other lenders to Genesis.
Silbert stated in an online statement that DCG did not borrow money from Genesis and has paid off all outstanding loans to Genesis.
In addition, he claimed that DCG had sent a proposal to Genesis and your advisors on December 29 without receiving a response.
The creator and CEO of Digital Currency Group, the corporation that owns Genesis, Barry Silbert, asserts that DCG did not borrow $1,675 from Genesis.
Gemini Trust Co. ceased transactions for its Earn crypto-lending division, which had granted Genesis more than $900 million, after the November collapse of FTX.
Cameron Winklevoss issued an open letter to Barry Silbert over the $900 million owing to Gemini customers.
In 2014, Cameron Winklevoss and model Natalia Beber attended a gala in Miami. The extremely affluent twins have not formally wed, but they have been known to date gorgeous women in high society.
Winklevoss responded, “Here we go again.” Stop pretending that you and DCG are innocent bystanders who played no role in causing this catastrophe.
It is completely dishonest.
Therefore, how does DCG owe Genesis $1.675 billion if it did not borrow the funds? Oh yeah, that promissory note…’ Winkelvoss wrote, hinting that Genesis loaned DCG the money.
Due to its FTX exposure, Genesis previously informed its clients that it could take “weeks” to find a viable solution and that bankruptcy is a definite possibility.
In the face of the lawsuit and rising pressure from his own irate customers, Winklevoss stated that he had presented Silbert with various offers for a way forward, including one on Christmas Day.
According to him, the $1.675 billion is owed to Gemini customers and other creditors of Genesis.
Winklevoss responded, “It’s not lost on us that you’ve been urgently trying to isolate DCG from the troubles you caused at Genesis.”
You should dispense with this fabrication because everyone knows, as you do, that DCG and Genesis are inextricably intertwined.
Winklevoss said that the funds in question were utilized for flawed DCG initiatives as well as “greedy share buybacks” and “illiquid venture investments.”
Cameron (Left) and Tyler Winklevoss have been in the business spotlight since their extremely public legal struggle with Mark Zuckerberg over the intellectual property that created Facebook.
Silbert founded DCG in 2015; he previously worked as an investment banker and sold the stock trading platform Second Market to Nasdaq in 2015.
Similarities exist between DCG and Genesis and the defunct cryptocurrency trading business FTX and its sibling trading arm Alameda Research.
The Gemini/Genesis split is the most recent consequence of the FTX/Alameda Research failure, and the connection between Genesis and DCG resembles in some respects the troubled union of FTX and Alameda.
On Tuesday, FTX founder and disgraced former CEO Sam Bankman-Fried is scheduled to enter a plea to fraud charges brought by US authorities. According to reports, he will enter a not guilty plea.
While Bankman-Fried may very certainly face a lengthy prison term, the repercussions for other large crypto tycoons whose customers will likely be losing millions of dollars remain uncertain.
DCG is the parent firm of five crypto-focused companies, the largest of which is Grayscale, a digital asset manager responsible for $28 billion worth of Bitcoin, Ether, and other assets.