Gemini Co-Founder Accuses DCGs Silbert of Bad Faith: As a result of FTX’s multibillion-dollar meltdown at the end of last year, the co-founder of crypto exchange Gemini has accused Digital Currency Group CEO Barry Silbert of “bad faith stall tactics” in a commercial dispute.
In an open letter published on Twitter, Cameron Winklevoss criticized Silbert and claimed that cryptocurrency broker Genesis Global Capital and its parent firm, DCG, owe Gemini’s customers $900 million.
According to the letter, Gemini has been waiting for a reimbursement agreement for the past six weeks with no success. CoinDesk is a subsidiary of DCG. In response, Silbert tweeted that DCG had sent a proposal to Genesis and Gemini’s advisors on December 29, 2022, but had yet to hear back.
Winklevoss also claimed that DCG “owes” Genesis $1.675 billion, which Winklevoss claims Silbert instead spent on DCG projects. Teachers’ money was used to finance “greedy share buybacks,” “illiquid venture investments,” and “kamikaze Grayscale NAV trades” that increased the fee-generating AUM of your Trust but at the expense of creditors.
For his part, Silbert tweeted back that DCG “did not borrow $1.675 billion from Genesis.” Moreover, he assured me that DCG has always been current on all of its loans to Genesis and has never missed an interest payment.
DCG has a $575 million debt to Genesis Global due this May, in addition to a $1.1 billion promissory note linked to liabilities from Genesis related to the Three Arrows Capital default that Silbert disclosed to shareholders in a statement last November.
Midway through the month of November, a week after Winklevoss’s competitor, the cryptocurrency exchange FTX, filed for bankruptcy, the redemptions on an interest-earning product called Earn were halted by Gemini Trust Co., which is co-owned by Winklevoss and his twin brother Tyler.
By lending their digital tokens to Genesis, investors might earn up to an annual interest rate of 8%. Following Genesis’s disclosure that its derivatives business had about $175 million parked on the platform of now-insolvent FTX, Gemini put a hold on redemptions until the situation stabilized.
When FTX declared bankruptcy, Genesis stopped processing withdrawals and stopped making new loans. Since then, Genesis’ creditors have been collaborating with restructuring attorneys in an effort to stave off bankruptcy.
With a lawsuit against the company’s Earn product alleging fraud and securities law violations and a swarm of furious Earn customers who have been unable to access their accounts, Winklevoss’ letter arrives at a time when the company confronts significant financial headwinds.
Please forward this to your friends if you find it interesting. Visit Lighthousejournal.org for the most recent celebrity news and updates.