By
Steve Muchoki
April 9th, 2024
Winklevoss accused Genesis of recklessly lending to Three Arrows Capital (3AC) and hoping to “buy time to dig themselves out of the hole which they had created”.
On Tuesday, January 10, Gemini co-founder Cameron Winklevoss wrote an open letter addressing the member of Digital Currency Group (DCG). In his letter, Winklevoss asked DCG chief Barry Silbert to solve the liquidity issues between Gemini and DCG subsidiary Genesis Global.
The Gemini CEO has argued that DCG owes $1.675 billion to the lending arm of Genesis Global. However, Silbert refused these claims adding that DCG never missed on interest payments to Genesis. In his recent open letter, Cameron Winklevoss alleged that Genesis loaned $2.36 billion to the now-bankrupt crypto hedge fund Three Arrows Capital (3AC).
Winklevoss claims that these funds were liquidated with DCG incurring a loss of $1.2 billion. He adds: “At this point, Barry Silbert had two legitimate options: restructure the Genesis loan book (inside or outside of bankruptcy court) or fill the $1.2 billion hole”.
In the letter, Cameron Winklevoss noted that DCG and Barry Silbert made “false statements and misrepresentations” to Gemini and other investors regarding the financial health of the company.
Genesis was the primary partner to the Gemini Earn product which offered investors 8% off their crypto. Following the collapse of FTX in November 2022, Genesis faced a major liquidity crisis and suspended withdrawals last month. More than $900 million of Gemini’s money is currently with Genesis.
In his statement, Cameron Winklevoss has demanded that Barry Silbert must step down as the CEO of DCG. He said that there’s no path forward as long as Silbert remains the CEO and that “he has proven himself unfit” to run the company. Winklevoss believes that under new management, Gemini can work along with DCG on a “win-win outcome for all”.
DCG Responds Back to Gemini Co-Founder Refuting Charges
The Digital Currency Groupo has responded to the recent statements made by Cameron Winklevoss. They called this open letter a “desperate and unconstructive publicity stunt” by Cameron Winklevoss. DCG noted that Winklevoss is trying to deflect blame from himself and Gemini, who are solely responsible for operating Gemini Earn and further marketing the program to its customers. In its additional statement, DCG noted:
“We are preserving all legal remedies in response to these malicious, fake, and defamatory attacks. DCG will continue to engage in productive dialogue with Genesis and its creditors with the goal of arriving at a solution that works for all parties”.
Furthermore, the Digital Currency Group (DCG) released its statements to shareholders noting that they never had any relation with Three Arrows Capital in an individual capacity. It noted that “DCG has never had a relationship with Three Arrows Capital. DCG has never coordinated purchases or sales of GBTC or any other investments with Three Arrows Capital”.