Gemini co-founder accuses DCG’s Silbert of ‘Bad Faith’ stalled in dispute over $900 million locked fund
The co-founder of crypto exchange Gemini has accused Digital Currency Group CEO Barry Silbert of “bad faith prevention tactics” as their respective companies come to a standstill over any dispute. business due to the multi-billion dollar explosion of FTX late last year.
Cameron Winklevoss criticizes Silbert in an open letter posted to Twitter, alleging crypto broker Genesis Global Capital and its parent company, DCG, owe Gemini customers $900 million. The letter alleges Gemini has been waiting for word on the repayment agreement for six weeks to no avail. DCG is also the parent company of CoinDesk.
Silbert responded, tweeting that DCG sent Genesis and Gemini advisors a proposal on December 29, 2022, and has not yet received any response.
Winklevoss also accused DCG CEO Barry Silbert of using the $1.675 billion that Winklevoss believes DCG “ows” to Genesis and using this money for the purposes of helping DCG’s other business ventures instead of. repayment to creditors.
“You took this money – the teachers money – to fuel greedy share buybacks, illiquid venture capital, and Grayscale NAV kamikaze transactions that increased the Trust Fund’s fee-generating AUM. your trust, all at the expense of your creditors and all for your own personal gain.”
Silbert replied, tweets that DCG “did not borrow $1.675 billion from Genesis.” He also said DCG has never missed an interest payment for Genesis and is present on all outstanding loans.
DCG has a promissory note of $1.1 billion in relation to debts from Genesis in connection with Three Arrows Capital’s default and in November Silbert wrote in a note to shareholders that DCG has approximately $575 million in debt to Genesis Global due this May.
Gemini Trust Co., which is co-owned by Winklevoss and his twin brother, Tyler, halted buybacks on a lucrative product called Earn in mid-November, a week after the exchange delivered. Cryptocurrency exchange rival FTX filed for bankruptcy. The product gives investors the opportunity to earn up to 8% return on their crypto by lending those digital tokens to Genesis.
Gemini’s buyback pause comes after Genesis’ announcement that its derivatives business was locked up for around $175 million on the now insolvent FTX platform. Genesis halted withdrawals and halted new loans as FTX filed for bankruptcy. Since then, Genesis creditors have been working with restructuring attorneys to prevent insolvency.
Winklevoss’ letter comes as his company faces major financial setbacks, including a lawsuit against the company’s Earn product, alleging fraud and violations of securities laws and regulations. a crowd of angry Earn customers can’t access their accounts.
Neither Winklevoss nor Silbert responded to requests for further comment.
