Gemini Takes Spat With DCG Public in Open Letter

Cameron Winklevoss has given Barry Silbert until Jan. 8th to commit to publicly working together

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Tyler and Cameron Winklevoss, Gemini Trust Co.; Source: Gemini Trust Co.

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Cameron Winklevoss accused fellow entrepreneur Barry Silbert for of “bad faith stall tactics,” in a letter posted on Twitter.

Winklevoss, the co-founder of centralized cryptocurrency exchange Gemini, claims that the chief executive of Digital Currency Group (DCG) had yet to repay $900 million that was lent to its digital asset prime brokerage arm as part of the Gemini Earn program.

“I am writing on behalf of more than 340,000 earn users who are looking for answers,” Winklevoss wrote.

Gemini Earn offered rewards up to 8% to customers who would lend out their cryptocurrencies to borrowers, namely Genesis Global Capital, a subsidiary of DCG. The product was forced to pause withdrawals after Genesis was caught up in the FTX collapse.

In an earlier statement posted in November, the company said that “We are aware that Genesis Global Capital, LLC (Genesis) — the lending partner of the Earn program — has paused withdrawals and will not be able to meet customer redemptions within the service-level agreement (SLA) of 5 business days.”

Winklevoss claims that he attempted to engage with Silbert on multiple occasions, most recently on Christmas Day, but was met with silence or resistance. 

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“You continue to refuse to get into a room with us to hash out a resolution,” Winklevoss wrote. “You hide behind lawyers, investment bankers and process…your behavior is not only completely unacceptable, it is unconscionable.”

Genesis is owed $1.675 billion by DCG according to Winklevoss, who claims that Silbert has been using this money to “fuel greedy share buybacks, illiquid venture investments, and kamikaze Grayscale NAV trades that ballooned the fee-generating AUM of your [Silbert’s] Trust.”

Silbert has denied these claims, tweeting that “DCG did not borrow $1.675 billion from Genesis,” and “has never missed an interest payment to Genesis and is current on all loans outstanding.” He further claimed that DCG offered a proposal to Gemini on Dec. 29th and had yet to receive a response. 

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In a letter to investors, Silbert said that Genesis was owed $575 million by DCG and had to repay these funds by May 2023, the Wall Street Journal reported on Nov. 22, 2022. In addition, a promissory note totaling $1.1 billion was also due by June 2023. 

Winklevoss has asked Silbert to “publicly commit to working together to solve this problem by January 8, 2023.”

His aggressive stance on the matter likely stems from the increasing pressure from investors and customers and recent lawsuits which claims that the exchange is selling interest-bearing cryptocurrency products.


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