Cameron Winklevoss, co-founder of cryptocurrency exchange Gemini, has announced that on January 2, 2022 Digital Currency Group (DCG) CEO Barry Silbert in an open letter, stating that it has been 47 days since withdrawals from Genesis were suspended. In the letter, Winklevoss claimed that DCG owed Genesis $1.675 billion. Silbert, however, responded on social media and denied the claim.
Gemini’s co-founder issued an open letter to DCG CEO Barry Silbert, demanding that the liquidity issue be resolved by January 8, 2023
Gemini co-founder Cameron Winklevoss took to Twitter on Monday to bring the open letter to the attention of Digital Currency Group (DCG) CEO Barry Silbert. In the letter, Winklevoss said he was writing on behalf of the 340,000 Gemini Earn users.” These users are real people, not numbers on a spreadsheet,” Winklevoss declared. Essentially, Gemini offered Earn users as much as 8% interest on certain digital assets, and was able to do so because Genesis Global Capital’s lending arm was a key partner.
Earn Update: An Open Letter to . 24} An Open Letter to @BarrySilbert.
– Cameron Winklevoss (@cameron) January 2, 2023
But the FTX contagion spread to Genesis, a creditor in FTX’s bankruptcy proceedings, and its lending arm withdrew and loan origination in mid-November 2022 suspended. Genesis was a key partner in Gemini’s Earn products, but the company also suspended withdrawalsthe same week. Subsequently, the Financial Times (FT) published a report claiming that Genesis owed $900 million to Gemini’s Earn users. Gemini also formed a committee of creditors to recover funds from Genesis, with Houlihan Lokey as financial advisor.
In addition, upset customers are preparing a potentialclass action lawsuitagainst Gemini alleging that the exchange misled customers with bad deals. In an open letter, Winklevoss alleges that his team attempted to resolve the matter with Silbert on multiple occasions on December 25, 2022. The letter states 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 for specific involvement, you hide behind lawyers, investment bankers, and the process,” the Gemini co-founder explained in the letter. Winklevoss further claimed that the funds were used for “greedy share repurchases, illiquid venture investments, and kamikaze grayscale NAV transactions.” The Gemini co-founder added,
We know that you are desperate to protect DCG from the problems you have created with Genesis, and since you know that DCG and Genesis are in the mix, it is better to discard this fiction.
After Mr. Winklevoss published his tweet, DCG